# Zin Technologies, Inc. v. United States

> United States Court of Federal Claims · November 19, 2024

URL: https://www.frixlaw.com/law-library/cases/10744033

## Case

- **Court:** United States Court of Federal Claims
- **Decided:** November 19, 2024
- **Precedential status:** Unpublished
- **Opinion:** Opinion
- **Judges:** Edward J. Damich
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

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- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10744033

## How later opinions describe it (automated extraction)

- holding that “proving success on the merits is a necessary element for a permanent injunction”

## Opinion text

No. 24-1165C
(Filed Under Seal: November 4, 2024)
(Reissued: November 19, 2024) 1

************************************
*
ZIN TECHNOLOGIES, INC., *
*
Plaintiff, *
*
v. *
*
THE UNITED STATES, *
*
Defendant, *
*
And *
*
SIERRA LOBO, INC., *
*
Defendant-Intervenor. *
************************************

Jeffery M. Chiow, Washington, D.C., for Plaintiff, with whom was Eleanor M. Ross, Tim
M. McLister, and Christopher M. O’Brien, of counsel.

David M. Kerr, Senior Trial Counsel, United States Department of Justice, Civil Division,
with whom were Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia M.
McCarthy, Director, and Corinne A. Niosi, Assistant Director, for the Government. Stephen T.
O’Neil, and Macallister A. West, National Aeronautics and Space Administration, of counsel.

Douglas Paul Hibshman, Washington, D.C., for Intervenor, with whom was Keeley A.
McCarty, Dana L. Molinari, and Jung Hyoun Han, of counsel.

1
The Court issued this opinion under seal on November 4, 2024, and the Court gave the
parties fourteen days to propose the redaction of competition-sensitive, proprietary, confidential,
or otherwise protected information. The Government and Intervenor filed their respective
proposed redactions, and Plaintiff did not file any proposed redactions. Plaintiff indicated to the
Court that it does not oppose the Government’s and Intervenor’s proposed redactions. Thus, the
Court adopts the parties’ redactions and issues the redacted opinion unsealed. Redactions are
indicated with “[ ].”
OPINION AND ORDER

Damich, Judge.

In this post-award bid protest, ZIN Technologies, Inc. (“ZIN Tech”), the incumbent
contractor, challenges the U.S. National Aeronautics and Space Administration’s (“NASA” or
the “Agency”) award of Request for Proposals No. 80GRC022R0016 (the “Solicitation”) to
Sierra Lobo, Inc. (“SLI”). ZIN Tech alleges that NASA failed to apply the Solicitation’s stated
evaluation criteria consistently to ZIN Tech and SLI, resulting in an arbitrary decision to award
the contract to SLI and not to ZIN Tech. Further, ZIN Tech argues that the award is tainted by
an unmitigated organizational conflict of interest (“OCI”) created by SLI’s major subcontractor
Leidos.

ZIN Tech filed a Motion for Judgment on the Administrative Record on August 27, 2024.
ZIN Tech seeks a permanent injunction preventing NASA from proceeding with the contract
award and asks the Court to set aside NASA’s award. The Government filed its Response and
Cross-Motion for Judgment on the Administrative Record. The Motions are fully briefed.

On September 18, 2024, ZIN Tech filed an unopposed Motion for Leave to Supplement
the Complaint. ECF No. 33. In the Motion, ZIN Tech states, “The U.S. Small Business
Administration (“SBA”) Office of Hearings and Appeals (“OHA”) issued a decision during the
pendency of this protest, concerning a Size Determination of Defendant-Intervenor, Sierra
Lobo.” ECF No. 33 at 1. ZIN Tech further explains in its Motion that the size determination
was issued in connection with the same procurement at issue in this protest. ECF No. 33 at 1.
The Court granted ZIN Tech’s Motion and adopted the proposed supplemental briefing schedule
for the size protest issue. ECF No. 34.

ZIN Tech filed a Motion for Judgment on the Administrative Record concerning its Size
Protest and Appeal. In its Motion, ZIN Tech argues that the OHA’s conclusion that SLI is an
eligible small business was arbitrary, capricious, unreasonable, and the product of clear legal
error. ZIN Tech seeks a permanent injunction preventing NASA from proceeding with the
contract award until a proper determination of SLI’s small business status is complete, and ZIN
Tech asks the Court to set aside NASA’s award. The Government and Intervenor filed their
respective Cross-Motions. The Motions are fully briefed.

Oral argument is unnecessary. Because both NASA and the OHA properly documented
their decisions and their analysis is reasonable, the Government’s and Intervenor’s Motions for
Judgment on the Administrative Record are GRANTED and ZIN Tech’s Motions are DENIED.

BACKGROUND 2

2
The facts in the background are derived from the administrative record (“AR”), which
includes Tabs 1-69 filed on August 13, 2024, and Tabs 70-91 filed on October 2, 2024. ECF No.
26, 44.

2
I. The Solicitation

On March 16, 2023, NASA issued a Solicitation which contemplated the award of an
Indefinite Delivery, Indefinite Quantity (“IDIQ”) contract, called SpaceDOC III, to support the
Glenn Research Center (“GRC”) at NASA. AR 1773. The GRC has responsibility for space
flight development and support for several space-related programs. 3 AR 3096. The Solicitation
seeks a contractor to assist with the development and delivery of technology, space flight
hardware and software, ground support equipment and spaces, mission integration and
operations, and sustaining engineering. AR 3099, 2930.

The Solicitation provided for a 100% small business set-aside and a North American
Industry Classification System (“NAICS”) code 541715 4 with a size standard of 1,000
employees. AR 13148. The Solicitation instructs that SpaceDOC III will be a single-award
IDIQ contract with a three-year Base Period, two two-year Option Periods, and one 6-month
Optional Extension. AR 2937. The Base Period is broken down into multiple project-specific
Base Orders and IDIQ Delivery Orders, with requirements and associated schedules for each
project established in each respective Base/Delivery Order. AR 2925-27, 2930, 3096-98, 3106.

The Solicitation states that the contractor will be required to support the definition,
design, development, analysis, fabrication, assembly, testing, verification, delivery and/or
operation of space flight systems, associated support systems and equipment, and related ground
development activities, that include research and technology developments and demonstrations.
AR 3099. The Solicitation further instructs that work will generally be performed at the
contractor’s facility. Id.

II. The Solicitation’s Evaluation Factors

The Solicitation states that it will be evaluated in accordance with FAR Part 15. The
Solicitation further states that Offerors will be evaluated based upon three evaluation criteria: (1)
Mission Suitability; (2) Cost/Price; and (3) Relevant Experience and Past Performance. AR
3078-79. To complete the evaluation, NASA established four committees to evaluate the various
factors and subfactors and to assist the Source Selection Evaluation Board (“SSEB”). AR 5-6.
The SSEB presents its findings to the Source Selection Authority (“SSA”), who then selects the
responsible offeror whose proposal provides the best value to the Government. AR 5, 3079.

3
The GRC has “space flight development responsibility that range from the Space
Launch System (SLS) Program, Orion service module, Gateway, numerous microgravity
research investigations on International Space Station (ISS) and launch vehicles, ISS power
system, electric propulsion systems, human research projects, space flight technology
developments and demonstrations of advanced power, propulsion, communications and other
systems, and the potential for space science instrumentation packages.” AR 3096.
4
Code 541715 refers to Research and Development in the Physical, Engineering and Life
Sciences—except Nanotechnology and Biotechnology. AR 13148.

3
A. Mission Suitability

The first evaluation factor, Mission Suitability indicates “the quality of the work to be
performed, the ability of the Offeror to accomplish what is offered, and the services to be
provided.” AR 3079. Within this factor, NASA will evaluate the offeror’s approach to the
technical requirements, including four representative base order hypotheticals, and the proposed
Management Plan and approach to program management, staffing, and risk management. AR
3081-88.

The Mission Suitability Factor is composed of three subfactors: (a) Understanding
Technical Requirements; (b) Coordination between Government, Contractor, and Principal
Investigators (“PIs”); and (c) Understanding the Approach to Meeting the Technical and
Engineering Requirements. AR 3080. The Solicitation instructs that each subfactor is to be
numerically scored and assigned an adjectival rating based on the numerical scores. The
proposals are then given one of the following ratings, which are defined in FAR 15.001, to
classify the evaluation findings under each Mission Suitability subfactor: “Significant Strength,”
“Strength,” “Weakness,” “Significant Weakness,” or “Deficiency.” AR 3080.

B. Cost/Price

For the second evaluation factor, Cost/Price, Solicitation provides that “the proposal
analysis techniques under FAR 15.404 and NFS 1815.404 will be considered to determine a fair
and reasonable price.” AR 3088. Further, NASA will conduct a cost realism analysis to “ensure
a realistic cost is determined and considered by the Government.” Id.

C. Past Performance

With respect to past performance, the Solicitation advises that NASA will evaluate “three
(3) areas of relevant experience and past performance of the Offeror and any Major
Subcontractors/Teaming Partners: (1) Past Performance Narrative (PPN); (2) Past Performance
Questionnaires (PPQ); and (3) Past Performance Databases (PPD).” AR 3089.

Past performance must be relevant, which means completed within the past five years and
similar in scope, complexity, size, type, length, customer, and considering whether performance
was completed as a prime or subcontractor. Id. Subcontractor experience “will only be deemed
relevant if the past performance information is deemed relevant to the work they are assigned in
the Offerors’ (and/or Major Subcontractor’s) proposal.” Id.

Finally, NASA will assign a Confidence Rating “based on the quality of each instance of
relevant past performance as well as the applicability of this experience to the requirements of
Attachment J.1-A – Statement of Work and this solicitation.” AR 3090-91.

D. Relative Weight of the Evaluation Factors

The Solicitation states that “As individual factors, the Mission Suitability Factor is more
important than the Cost/Price Factor, which is more important than the Relevant Experience and

4
Past Performance Factor. When combined, Mission Suitability and Relevant Experience and
Past Performance are significantly more important than the Cost/Price Factor alone.” AR 3092.

III. Discussions

Both SLI and ZIN Tech timely submitted their initial proposals. After evaluating the
offerors’ initial proposals, NASA opened discussions with SLI and ZIN Tech on September 1,
2023. See generally, AR 5108-94. During its discussions with both offerors, NASA identified
weaknesses, questions, and issues in each offeror’s proposal. NASA stated in its letter to each
offeror that, “this information is provided during the discussion phase with the intent of allowing
you the opportunity to revise your proposal after the conclusion of the discussions.” AR 5108,
5155. After discussions were conducted, NASA allowed offerors to submit a Final Proposal
Revision (“FPR”) to correct any weaknesses identified during discussions.

During its discussions with SLI, NASA identified five weaknesses and one significant
weakness under the first factor, Mission Suitability. AR 5110-12. Under the second factor,
Cost/Price, NASA determined that a portion of SLI’s Major Subcontractor’s, Leidos, proposed
direct labor rates appeared low. AR 5113. Under the third factor, Past Performance NASA
identified no adverse past performance but noted that SLI’s “proposal did not clearly identify
what specific roles your Major Subcontractor [Leidos] would perform on the contract so it was
difficult for the Government to determine whether the relevant examples provided were
representative of the actual work they would perform.” Id.

During its discussions with ZIN Tech, NASA identified four weaknesses and one
significant weakness under the Mission Suitability Factor. AR 5157-59. With respect to ZIN
Tech’s Past Performance Factor, NASA noted that it had discovered adverse performance
information “outside the existing [Contractor Performance Assessment Reporting System
(“CPARS”)] reports,” and provided ZIN Tech an opportunity to respond to that information. AR
5160. The adverse information included ZIN Tech’s problems with cost overruns and
scheduling, among other concerns. AR 5160.

On September 22, 2023, offerors were notified that FPRs were due by October 6, 2023.
AR 5185, 5187, 5141, 5144.

IV. Evaluation, Award, and Debriefing

Following discussions, both SLI and ZIN Tech SLI timely submitted their FPRs on
October 6, 2023. AR 5195-6018, 6019-7234.

A. NASA’s Evaluation of SLI’s Proposal

NASA summarized its evaluation of SLI’s FPR as follows:

5
AR 8915. For the Mission Suitability Factor, SLI identified ten key personnel and positions
descriptions that SLI planned to use in its performance approach. 5 AR 5571-82. SLI also
provided additional detail regarding the role of its subcontractor, Leidos. AR 5492.

For the Cost/Price Factor, SLI’s proposed price of $282,159,744 is the 2nd lowest of the
Offerors within the competitive range and substantially below the IGCE. AR 8885. The SSEB
did not identify any cost risks in the FPR. Id.

For the Past Performance Factor, SLI submitted 5 contracts for consideration: (1)
Environmental Test and Integration Services (“ETIS II”); (2) Multi-Divisional Engineering
Design, Analysis Lab- Wide Support (“MEDALS”); (3) Omnibus Multidiscipline Engineering
Services (“OMES II”); (4) Cargo Mission Contract 3 (“CMC3”); and (5) Research, Engineering
and Mission Integrations Services (“REMIS”). AR 3723-47. NASA also identified a sixth
contract in CPARS. AR 8494, 8885-86. NASA concluded that all of SLI’s contracts were
“relevant” and “highly pertinent.” AR 8885-86, 8497-8504. For each Past Performance
example, SLI disclosed its cost overruns and the action it took to correct those overruns in
accordance with the Solicitation requirements. See AR 3728 (ETIS II), 3733 (MEDALS), 3737
(OMES II), 3742 (CMC3), 3746 (REMIS).

Both offerors submitted an OCI Assessment and an OCI plan with specific mitigations in
their FPRs. Id. SLI’s OCI Assessment disclosed Leidos’ NASA contract for the Orion Laser Air
Monitor System (“LAMS”), among other LAMS work, and stated that there is no OCI
anticipated in relation to the SpaceDOC III contract:
Prior to including [ ] in its proposal, SLI obtained a letter of commitment
from [ ]. That letter was not submitted to NASA with SLI’s proposal
because the Solicitation did not require letters of commitment, and thus it is not part

5
This includes four identified key personnel and six position descriptions. SLI proposed
[ ] as its Deputy Program Manager, noting that he has over twenty years of
experience with NASA GRC space flight development programs. AR 5496. SLI included a
one-page resume for [ ] as required by the Solicitation. AR 5572. The resume
showed that [ ] was currently the Director of Engineering for ZIN Tech. AR 5572.

6
of the Administrative Record, but the letter of commitment demonstrnted -
- intent to accept employment with SLI as the Deputy Program Manager in
the event that SLI was designated as the awardee.

AR 3441, 3437, 3440.

B. NASA's Evaluation of ZIN Zech's Proposal

NASA summarized its evaluation of ZIN Tech's FPR as follows:

ZIN Technologies, Inc.
Mission Sultablllty Score 842/1000
Understanding Technical
Very Good
Requirements (400 points)
Mission
Suitability Product Assurance (200 points) Good

Management Plan and Approach
Very Good
(400 points)

Cost/Price Proposed/Probable Cost/Price

Relevant Experience Moderate Level of
Level of Confidence
& Past Performance Confidence

AR 8962. For the Mission Suitability Factor, NASA assigned ZIN Tech's proposal 2
significant strengths, 11 sti·engths, and 3 weaknesses ( ~ For the Cost/Price Factor,
ZIN Tech 's total proposed cost/price is approximately- lower than SLI's. AR 8962,
8915.

For the Past Perfonnance Factor, ZIN Tech submitted 4 contracts including the
incumbent conti·act, and NASA identified a fifth conti·act from ZIN Tech's CPARS. AR 8889,
8510. NASA found all five of ZIN Tech's contracts to be relevant and "ve1y highly pe1t inent to
the SpaceDOC III requirements." Id. The PPQ evaluation revealed "mostly Satisfacto1y and
Ve1y Good ratings[.]" Id. For the PPD evaluation, "ZIN received mostly Satisfacto1y and Ve1y
Good ratings" and "a small percentage of Exceptional" and fewer "Marginal ratings." Id.
Overall, ZIN Tech "demonsti·ated effective performance; fully responsive to conti·act
requirements; reportable problems, but with little identifiable effect on overall perfo1mance." Id.

C. Conclusion of NASA's Evaluation and Award Decision

NASA perfo1med an OCI review and analysis cl.m ing its evaluation of proposals. AR
8396-418. NASA reviewed the OCI Plan that SLI submitted with its proposal, and NASA
peifonned its own independent review of potential OCis arising from other conti·acts held by SLI
and its subconti·actors. AR 8396-418. NASA specifically evaluated potential OCis presented by
SLI's major subcontractor, Leidos, due to Leidos ' role on other NASA projects. 6 With respect to
the LAMS Conti·act, NASA dete1mined that there is no risk of an unfair competitive advantage

6 NASA considered Leidos' role on the Safety, Health, and Mission Assurance

("SHeMA-2") Contract and found that there is no actual or apparent OCI. AR 8401.

7
to SLI, and that no OCI exists on any other basis. AR 8412. NASA found that neither offeror
presented an OCI with respect to the SpaceDOC III contract. AR 8852.

Next, NASA determined that both SLI and ZIN Tech had relevant and very highly
pertinent past performance examples. AR 8886, 8889. However, SLI’s PPQs and PPDs were
predominantly rated Exceptional and Very Good, while ZIN Tech’s PPQs and PPDs were
predominantly Satisfactory and Very Good. AR 8886, 8889. ZIN Tech’s PPDs also included
some Marginal ratings. AR 8889. In reviewing SLI’s Past Performance, NASA could not obtain
a PPQ or PPD for the OMES II contract, so it treated OMES II neutrally in its overall
Confidence Rating. AR 8647-48.

In reviewing ZIN Tech’s Past Performance, NASA identified concerns regarding cost
overruns, cost estimating, and scheduling that were not resolved through discussions, even after
providing ZIN Tech the opportunity to address them:

Projects are having issues with cost overruns and the Government has received
multiple cost overrun proposals in the last six months. The board thoroughly
reviewed and considered the information provided. Ultimately, the response did not
address what corrective action would be taken to alleviate the risk of cost overruns
continuing to occur in the future.

AR 8655. Ultimately, NASA found that while ZIN Tech’s proposed Price is nominally lower
than SLI’s proposed Price, SLI received higher Mission Suitability and Past Performance ratings:

AR 8883. NASA’s Source Selection Authority determined that SLI presented the best value to
the government:

When SLI’s distinct technical advantage is combined with the significant advantage
that SLI’s proposal also presents in the Relevant Experience and Past Performance
Factor, the qualitative superiority of SLI’s proposal substantially outweighs the
relatively modest cost savings that ZIN’s proposal presents.

8
AR 8895. Thus, NASA awarded the Contract to SLI on February 22, 2024. AR 8997. NASA
notified ZIN Tech on February 22, 2024, that it had not been selected for award. AR 8899. On
March 1, 2024, NASA provided ZIN Tech with a post award debriefing. See generally AR
8949-96.

V. Procedural History

A. ZIN Tech’s GAO Protest

On March 6, 2024, ZIN Tech filed a timely protest with the Government Accountability
Office (“GAO”). At the GAO, ZIN Tech argued that Leidos’ LAMS project created a significant
potential impaired objectivity OCI. AR 11810-12. Specifically, ZIN Tech argued that Leidos’
role as a major subcontractor on the SpaceDOC III contract places it in a position to define, test,
analyze, and verify the operation and quality of the same LAMS equipment it is currently
producing under the NASA Universal Stage Adapter contract. AR 11812.

Further, ZIN Tech argued that NASA’s assessment of weaknesses to the Mission
Suitability Factor of ZIN Tech’s proposal is flawed because the assessed weaknesses are
contradicted by ZIN Tech’s proposal and some of the weaknesses were merely “typographical”
in nature. AR 11798-11803. ZIN Tech also contended that NASA’s evaluation of ZIN Tech’s
Past Performance Factor is unreasonable, inconsistent with the evaluation criteria and the
evaluation record, and disparate. AR 11803-11810. Finally, ZIN Tech argued that NASA’s
discussions were unequal because NASA failed to address certain concerns it had with ZIN
Tech’s proposal during discussions but raised concerns it had with SLI’s proposal during
discussions. AR 11814-21.

B. NASA’s OCI Investigation

In response to ZIN Tech’s GAO protest, on April 29, 2024, the contracting officer
completed an OCI investigation and issued a memorandum. AR 12148. The contracting
officer’s investigation included reviews of both the SpaceDOC III and LAMS contracts, as well
as consultations with the SpaceDOC III contracting officer’s representative, the SpaceDOC II
contracting officer’s representative, the SpaceDOC II and III alternate contracting officer’s
representative, the LAMS contracting officer, and the LAMS contracting officer’s representative.
AR 12144, 12309-12310. Overall, the contracting officer determined that no OCI existed that
would preclude award of the SpaceDOC III contract to SLI. AR 12148.
C. The GAO’s Denial of ZIN Tech’s Protest

On June 13, 2024, the GAO denied ZIN Tech’s protest. See AR 12312. The GAO
rejected ZIN Tech’s contention that NASA failed to mitigate an OCI with respect to the
awardee’s major subcontractor, Leidos. AR 12289-12312. The GAO explained, “The
protester’s vague and conclusory responses are insufficient to demonstrate that an impaired
objectivity OCI exists or has the potential to exist due to Leidos’s work on the LAMS contract.”
ZIN Tech Inc., B-422405, B-422405.2 (Comp. Gen. July 13, 2024); AR 1478-79.

9
After reviewing the protested weaknesses assessed to ZIN Tech’s proposal, the GAO
found that NASA followed the instructions detailed in the Solicitation and reasonably
determined to assess those weaknesses to ZIN Tech’s proposal. Further, the GAO found that
“while the protester contends these errors were just typographical, we find that the agency
reasonably concluded that the lack of clarity with regard to the protester’s understanding of risk
level may indicate a lack of understanding.” AR 12296. Additionally, the GAO found that
NASA’s evaluation of the Past Performance Factor reasonable, consistent with the Solicitation,
and adequately documented. AR 12305.

Finally, the GAO also rejected ZIN Tech’s allegations of unequal discussions. AR 1229-
12300. The GAO did not accept ZIN Tech’s argument that simply because SLI “received an
extra page of discussions points or more slides in a slide presentation, this meant that discussions
were unequal.” AR 12300. Similarly, the GAO rejected ZIN Tech’s argument that discussions
were unequal solely because SLI “was able to improve its technical ratings more than the
protester was able.” Id. The GAO stated that pursuant to the Federal Acquisition Regulation
(“FAR”) 15.306(d), “discussions should be tailored to each offeror’s proposal.” Id. Because the
GAO found that NASA described in detail its process for conducting discussions, including
giving both offerors a discussions letter and a 2-hour in-person briefing regarding the points
raised, discussions were conducted equally. Id.

D. ZIN Tech’s Small Business Protest and OHA Appeal

After offerors were notified that SLI had been selected for award, ZIN Tech filed a size
protest with the SBA’s Area Office alleging that SLI was affiliated with HX5 Sierra LLC (HX5
Sierra) and National Aerospace Solutions, LLC (NAS), and thus each of the employees from
HX5 Sierra and NAS should be included in ZIN Tech’s employee count. AR 12315-17. ZIN
Tech asserts that SLI’s LinkedIn profile states that it has over 800 employees, that HX5 Sierra
has more than 350 employees, and NAS has 1,802 “team members.” AR 12315. ZIN Tech
argues that these employees should be included in SLI’s count. AR 12315-16. ZIN Tech asserts
if these employees are aggregated to SLI’s total employee count, then SLI will not be considered
an eligible small business, as its employee count would exceed the 1,000-employee size
standard. AR 12316.

In conducting a general affiliation analysis between SLI and HX5 Sierra and NAS, 7 the
Area Office found HX5 Sierra is affiliated with SLI and that SLI was not affiliated with NAS.
AR 12703. The Area Office then aggregated the number of employees for SLI and its affiliate,
HX5 Sierra, and concluded that SLI is a small business as its size does not exceed the 1,000-
employee size standard. AR 12703-07.

ZIN Tech then appealed the size determination with the OHA. AR 12971-72. The OHA
affirmed the size determination and found that SLI is not affiliated with NAS or HX5 Sierra, as
HX5 Sierra and NAS are valid joint ventures of which SLI is a minority member. AR 13085-86.
The OHA applied 13 C.F.R. § 121.103(h) to calculate SLI’s size using its proportionate share of

7
A populated joint venture is “where work is performed by the joint venture entity itself
and not by the individual joint venture partners.” 13 C.F.R. § 121.103(h)(4)(2024).

10
employees from each joint venture and found that the proportionate share did not exceed the
1,000-employee size standard, and thus SLI is an eligible small business for the subject
procurement. AR 13085-86. The appeal was subsequently dismissed. AR 13085-86.

DISCUSSION

ZIN Tech brings five challenges: (1) NASA ignored SLI’s significant and unmitigated
impaired objectivity OCI; (2) NASA’s Factor 1 evaluation of key personnel was flawed, and the
resulting rating was unreasonable; (3) NASA’s Factor 3 evaluation failed to follow the
Solicitation’s instructions and failed to treat offerors’ proposals equally; (4) NASA disparately
treated SLI with respect to cost overruns; and (5) the OHA acted arbitrarily and capriciously
when it disregarded relevant evidence in the record.

ZIN Tech seeks permanent injunctive relief to enjoin NASA from continuing its award to
SLI. When considering whether to grant a permanent injunction, the court must consider
whether “(1) the plaintiff has succeeded on the merits, (2) the plaintiff will suffer irreparable
harm if the court withholds injunctive relief, (3) the balance of hardships to the respective parties
favors the grant of injunctive relief, and (4) the public interest is served by a grant of injunctive
relief.” Centech Grp., Inc. v. United States, 554 F.3d 1029, 1037 (Fed. Cir. 2009). Although an
award of injunctive relief is based on consideration of this four-factor test, failure to achieve
success on the merits is dispositive. See Dell Fed. Sys., L.P. v. United States, 906 F.3d 982, 999
(Fed. Cir. 2018) (holding that “proving success on the merits is a necessary element for a
permanent injunction”). For the reasons below, the Court finds that all five of ZIN Tech’s
challenges lack merit. The Court considers each in turn.

Our review is deferential in accordance with the standard set forth in the Administrative
Procedures Act, 5 U.S.C. § 706, which is to say that we review agency action in a procurement
for illegality and a lack of rationality. Impressa Construzioni Geom. Domenico Garufi v. United
States, 238 F.3d 1324, 1332-33 (Fed. Cir. 2001). So long as the agency’s decision was not
irrational or otherwise illegal, we will leave it undisturbed.

This Court decides a motion for judgment upon the administrative record pursuant to
RCFC 52.1. The Court determines whether “given all the disputed and undisputed facts, a party
has met its burden of proof based on the evidence in the record.” Bannum, Inc. v. United States,
404 F.3d 1346, 1356-57 (Fed. Cir. 2005). “[T]he judgment on an administrative record is
properly understood as intending to provide for an expedited trial on the record.” Id. at 1356.

I. NASA Considered and Investigated Whether SLI’s Proposal Contains an OCI and
Reasonably Found that No OCI Exists.

ZIN Tech argues that SLI has an unmitigable OCI because its subcontractor, Leidos, also
works on the NASA Laser Air Monitoring System (“LAMS”) contract, which is a contract
focusing on the production of systems that monitor the air quality, temperature, and pressure on
the Orion spacecraft for use on the Artemis missions. ECF No. 28 at 2, 24, AR 12143. ZIN

11
Tech asserts that as the major subcontractor under the SpaceDOC III contract, 8 Leidos will be
responsible for the testing, verification and operation of space systems and subsystems like the
LAMS system, which is being developed and built by Leidos under the LAMS contract. ECF
No. 28 at 2.

An ‘impaired objectivity’ OCI ‘occurs when a government contractor has conflicting
obligations under different government contracts, that compromises the contractor’s ability to
render impartial judgment.” Sigmatech, Inc. v. United States, 144 Fed. Cl. 159, 181 (2019)
(quoting Axiom Res. Mgmt., Inc. v. United States, 78 Fed. Cl. 576, 592 n.17 (2007)). “[T]he
‘primary concern’ of an impaired objectivity OCI is that ‘a firm might not be able to render
‘impartial advice.’” Id. (quoting Turner Const. Co. v. United States, 94 Fed. Cl. 561, 569
(2010)).

The issue before this Court is whether an OCI is so prevalent that it gave an advantage to
one bidder over the other, and whether the contracting officer failed to use appropriate discretion
and to follow the required procedures in determining that no OCI exists. See PAI Corp. v.
United States, 614 F.3d 1347, 1351-1352 (Fed. Cir. 2010). The Court “will not overturn a
contracting officer’s determination unless it is arbitrary, capricious, or otherwise contrary to
law.” Id. at 1352. “To demonstrate that such a determination is arbitrary or capricious, a
protestor must identify ‘hard facts’; a mere inference or suspicion of an actual or apparent
conflict is not enough.” Id. (quoting C.A.C.I., Inc.-Fed. v. United States, 719 F.2d 1567, 1581
(Fed. Cir. 1983)).

Here, the record reflects that NASA followed the FAR requirements and thoroughly
reviewed any potential OCIs arising from SLI’s proposal during its initial evaluation 9 and then

8
The performance tasks of SpaceDoc III, the contract at issue in this case, include “test,
verification, delivery, and/or operation of space flight systems [and] associated support systems.”
AR 3099.
9
Both offerors submitted a an OCI Assessment and an OCI plan with specific
mitigations. Id. SLI’s OCI Assessment disclosed Leidos’ NASA contract for the Orion Laser
Air Monitor System (“LAMS”), among other LAMS work, and stated that there is no OCI
anticipated in relation to the SpaceDOC III contract. AR 3441, AR 3437, 3440. SLI provided
the following information regarding the ongoing LAMS contract:
Laser Air Monitor System to measure oxygen, carbon dioxide, water vapor,
temperature, and pressure accurately enough to detect unsafe levels of these
elements within the Orion spacecraft in time to allow the crew to respond to the fast
changes in air composition in the Orion cabin.

Unequal/Unfair Access to Information and Data: None. Impaired Objectivity:
None. Biased Ground Rules: None. Findings: None. Mitigation Approach: None

AR 3440-41. NASA performed its initial OCI review and analysis during its evaluation of
proposals. AR 8396-418. NASA reviewed the OCI Plan that SLI submitted with its proposal,
and NASA performed its own independent review of potential OCIs arising from other contracts

12
again during its OCI investigation following ZIN Tech’s GAO bid protest. See FAR §
9.504(a)(1), § 9.506(a), (b).

During its initial evaluation, the record reflects that NASA reviewed the OCI Plan that
SLI submitted with its proposal, and NASA performed its own independent review of potential
OCIs arising from other contracts held by SLI and its subcontractors. AR 8396-8418. NASA
specifically evaluated potential OCIs presented by SLI’s major subcontractor, Leidos, due to
Leidos’ role on other NASA projects. 10 With respect to the LAMS Contract, NASA determined
that there was no risk of an unfair competitive advantage to SLI, and that no OCI existed on any
other basis. AR 8412.

In response to ZIN Tech’s GAO bid protest, NASA conducted a second and specific OCI
review to evaluate whether Leidos’ role on SpaceDOC III presented any form of OCI with
respect to its work on LAMS, including impaired objectivity, biased ground rules, and unequal
access to information OCIs. AR 12142-48. The contracting officer’s investigation included
reviews of both the SpaceDOC III and LAMS contracts, as well as consultations with the
SpaceDOC III contracting officer’s representative, the SpaceDOC II contracting officer’s
representative, the SpaceDOC II and III alternate contracting officer’s representative, the LAMS
contracting officer, and the LAMS contracting officer’s representative. 11 AR 12144, 12309-
12310.

The OCI investigation included various factual findings and responses to the protester’s
allegations. AR 12142-48. For example, NASA stated that the investigation revealed that the
design, development, test, and evaluation (DDT&E) work for the LAMS contract was completed
on a predecessor contract (other than LAMS), and even though there was some additional minor
DDT&E work to be completed, all of that work would be done “within the scope of the LAMS
contract,” and not any other contract, such as SpaceDOC III. AR 12148. The agency also
confirmed that the Defense Contract Management Agency performs the pre-delivery inspections
of LAMS deliverables, and that post-delivery, the evaluation and testing activities of LAMS
deliverables are performed under a support services contract vehicle other than SpaceDOC and
are also done under strict supervision of NASA personnel. AR 12147-48.

Finally, the contracting officer explained there is “little to no likelihood” that
performance under the SpaceDOC contract would have any bearing whatsoever on the LAMS

held by SLI and its subcontractors. AR 8396-418. NASA specifically evaluated potential OCIs
presented by SLI’s major subcontractor, Leidos, due to Leidos’ role on other NASA projects.
With respect to the LAMS Contract, NASA determined that there is no risk of an unfair
competitive advantage to SLI, and that no OCI exists on any other basis. AR 8412. NASA
found that neither offeror presented an OCI with respect to the SpaceDOC III contract. AR
8852.
10
NASA considered Leidos’ role on the Safety, Health, and Mission Assurance
(“SHeMA-2”) Contract and found that there is no actual or apparent OCI. AR 8401.
11
In conducting the OCI investigation, NASA spoke with the following individuals to
complete a comprehensive investigation: [ ]. AR 12144.

13
contract, including with respect to use of Glenn Research Center’s telescience support center, as
there had been no previous orders under SpaceDOC II that directly supported either Artemis
operations or Orion projects. AR 12148. In any event, because the SpaceDOC III contract is to
be performed utilizing a specific ordering structure, the contracting officer noted that any later
identified work that has the potential to present an OCI could be assessed and avoided by, for
example, assigning the work to a different contractor other than Leidos for that particular order.
Id. Ultimately, the contracting officer concluded “there is no impaired objectivity OCI with
respect to the LAMS contract that would preclude award of SpaceDOC III to [Sierra Lobo].” Id.
NASA affirmatively concluded that “the SpaceDOC III contractor is not in a position to draft
requirements or statements of work for LAMS, benefit from any unequal access to information
in any future LAMS competition, or suffer impaired objectivity from performance of the LAMS
contract.” Id.

In its Cross Motion, the Government asserts that NASA conducted a well-reasoned,
thorough investigation and analysis of the OCI allegation and rightfully rejected ZIN Tech’s
allegations as meritless. This Court agrees. Although the record is clear that NASA performed a
thorough investigation ruling out any potential OCI, ZIN Tech maintains that the contracting
officer’s investigation was “hurried,” and that the contracting officer “failed to meaningfully
investigate the significant danger” posed by Leidos’ work on the LAMS contract. ECF No. 28 at
21, 26. Despite NASA’s thorough investigation, ZIN Tech argues here that “there is a
significant potential that Leidos will be supporting Orion-related operations, testing or evaluation
of the life-safety critical LAMS system it produces.” ECF No. 28 at 26. ZIN Tech argues that
“if that happens, Leidos (or its teammate) may be asked to pass judgement on the performance of
its own LAMS system.” Id. These same allegations were considered during NASA’s
investigation, and the contracting officer determined that ZIN Tech’s statements were not
accurate as the:

[Design, Development, Test & Engineering work (“DDT&E”)] for LAMS was
completed on a predecessor contract. Although the scope of the LAMS contract
includes some additional DDT&E work based on some additional data received
from the Artemis II mission, this scope is relatively minor. Furthermore, this
additional DDT&E work is included within the scope of the LAMS contract itself
and is not being performed under any other contract. Consequently, there is no
possibility of the SpaceDOC III contractor performing DDT&E of the Orion
capsule’s LAMS system.

AR 12145. Thus, the record shows that ZIN Tech’s allegations are unfounded. Further, ZIN
Tech inexplicably argues that NASA interviewed the wrong people in performing its OCI
investigation, but as explained above, see supra footnote 11, the record shows that NASA
interviewed all the appropriate contracting officers and contracting representatives necessary to
complete a comprehensive investigation. See FAR 9.504(b). In addition, ZIN Tech brought
these same allegations before the GAO and the GAO denied ZIN Tech’s protest finding that ZIN
Tech failed to support its allegation beyond mere speculation:

[T]he protester has not provided any hard facts that would lead us to conclude there
is an impaired objectivity OCI. In response to the agency’s investigation, the

14
protester has not identified which work in the SpaceDOC III contract would put
Leidos in a position to evaluate its own performance under the LAMS contract.
Notably, the protester has not refuted the agency’s statements that additional
DDT&E work for the LAMS contract would be completed within the scope of that
contract, or that inspections, evaluations, and testing of the LAMS deliverables are
done by another agency or under a different contract vehicle other than SpaceDOC
III. The protester’s vague and conclusory responses are insufficient to demonstrate
that an impaired objectivity OCI exists or has the potential to exist due to Leidos’s
work on the LAMS contract.

AR 12286-87. Therefore, the GAO found that ZIN Tech failed to show that NASA’s award to
SLI presented any kind of OCI, and its impaired objectivity allegations amounted to no more
than mere speculation. Similarly, here, ZIN Tech’s protest before the Court has presented no
hard facts that warrant a different outcome. See PAI, 614 F.3d at 1352 (“To demonstrate that
such a determination is arbitrary or capricious, a protestor must identify ‘hard facts’; a mere
inference or suspicion of an actual or apparent conflict is not enough.”) (quoting C.A.C.I., Inc.-
Fed. v. United States, 719 F.2d 1567, 1581 (Fed. Cir. 1983)). ZIN Tech’s arguments are not
supported by the record and thus equate to mere speculation. 12 The Agency is entitled to
significant discretion in identifying and mitigating conflicts of interest, and here NASA
performed multiple rounds of OCI analysis and investigation, each time concluding that no OCI
exists. The FAR “recognize[s] that ‘the identification of [organizational conflicts of interest] and
the evaluation of mitigation proposals are fact-specific inquiries that require the exercise of
considerable discretion.” Id. at 1352 (quoting Axiom Res. Mgmt. v. United States, 564 F.3d
1374, 1382 (Fed. Cir. 2009)).

Rather than point to evidence of an actual or apparent OCI, ZIN Tech argues that OCIs
are inevitable between SpaceDOC III and LAMS, and that it is unreasonable to think that NASA
will appropriately deal with an OCI should one arise. ECF No. 28 at 19-20. This allegation is
contrary to the record. NASA’s investigation concluded that:

Even if there were a possibility, arising from the SpaceDOC III SOW, of the
SpaceDOCIII contractor gaining an unfair competitive advantage with respect to
the LAMS contract from drafting requirements or other material to be incorporated
into a statement of work, adequate measures are in place to avoid any realization of
that possibility. First, the SpaceDOC III contract contains the NFS 1852.209-71
Limitation of Future Contracting clause, which, in relevant part, renders the
Contractor ineligible to perform work described in a solicitation that incorporates

12
In its Response, ZIN Tech asserts that the Government agrees that the scope of the
statement of work (SOW) for SpaceDOC III “could mean that SLI could review the work of
Leidos.” ECF No. 35 at 2 (citing ECF No. 32 at 10). In its Reply, the Government states that
this is incorrect. The Government states that while “we point out in our motion that the
SpaceDOC III SOW generally includes the potential to support Orion and Artemis operations,
but as established in our motion and in the Contracting Officer’s OCI Investigation
Memorandum, there is no rational way that this would result in SLI reviewing the work of
Leidos, its major subcontractor.” ECF No. 32 at 9-12 (citing AR 12142-48); see also AR 3126.

15
specifications or statements of work that the contractor, through performance of
SpaceDOC III, was required to develop. (See AR Tab 4b at 32-33). SpaceDOC III
also contains the NFS 1852.237-73 clause, Release of Sensitive Information (June
2015), which requires that the Contractor “must be operating under … [NFS] clause
at 1852.237-72, Access to Sensitive Information” and “obligates the service
provider to … (1) comply with all specified procedures and obligations, including
the O[CI] Avoidance Plan, which the contract has incorporated as a compliance
document” with a mandatory flow-down for subcontracts. (See AR Tab 04b at 78-
79).

Second, the SpaceDOC II contract contains the NFS 1852.237-72 Access to
Sensitive Information clause, which incorporates an OCI Avoidance Plan as a
compliance document. (See AR Tab 4b at 51). The RFP included specific
instructions for preparing an acceptable OCI Avoidance Plan, including provisions
to ensure that the Plan’s restrictions are flowed down to subcontractors. (See AR
35-36).

Third, the LAMS contract also includes the Access to Sensitive Information clause,
as well as a Disclosure of Conflict Interest After Award clause, which states, “If, at
any time during the performance of this contract, the Contractor or Government
identifies an actual or potential organizational conflict of interest that was not
adequately disclosed and resolved prior to award, the disclosing part shall make a
prompt and full disclosure in writing to the other party. This disclosure shall include
a description of the action that needs to be or has been taken in order to resolve the
conflict. This requirement also includes subcontractors’ actual or potential
organizational conflicts of interest not adequately disclosed and resolved prior to
award.” Accordingly, even if there were a possibility that the SpaceDOC III SOW
could give rise to a biased ground rules OCI with respect to the LAMS contract, the
SpaceDOC III contract contains measures that adequately avoid the realization of
such a possibility.

AR 12146. Thus, NASA reasonably concluded that even if it is possible for a SpaceDOCIII
contractor to gain an unfair competitive advantage with respect to the LAMS contract,
appropriate measures are in place that would mitigate and avoid a conflict of interest. Moreover,
the record clearly demonstrates that there are no actual or apparent OCIs that could or should
prevent NASA from awarding the contract to SLI, and to the extent that any OCI does arise, SLI
submitted an OCI Plan in accordance with the Solicitation requirements, which NASA
determined would mitigate potential OCIs. See FAR 9.504(e) (“The contracting officer shall
award the contract to the apparent successful offeror unless a conflict of interest is determined to
exist that cannot be avoided or mitigated.” (emphasis added)). Accordingly, the Court holds that
NASA’s OCI determination is reasonable and supported by both the Solicitation and FAR
requirements.

II. NASA Properly Evaluated Offeror’s Key Personnel under Factor 1.

A. NASA properly evaluated SLI’s Key Personnel.

16
ZIN Tech argues that NASA erred in evaluating SLI’s key personnel because it should
have assessed a weakness for SLI proposing a current employee of ZIN Tech’s— [
] —as one of its key personnel. ECF No. 28 at 22-23. ZIN Tech does not claim that
SLI misrepresented [ ] availability or that the Solicitation prohibited proposing
personnel who are not yet employed by the offeror, but instead ZIN Tech argues that because [
] does not currently work for SLI, SLI “cannot promise [he] will be available for contract
performance.” ECF No. 28 at 22-23. The Court agrees with the Government that this position
is meritless and refuted by the Solicitation and applicable law. 13

Here, the Solicitation required offerors to identify key personnel position descriptions and
qualifications but did not require naming specific individuals who would fill those positions. AR
3055. If offerors identified a specific person to fill a key personnel position, they were to
provide a one-page resume for that person. Id. Further, the Solicitation contemplated that
offerors might propose incumbent personnel as key personnel. Under Volume I – Mission
Suitability, Subfactor 3 – Management Plan and Approach, NASA was to evaluate offerors on
“the effectiveness, benefits, and adequacy of their plans for establishing the workforce, including
any plans for hiring employees of the incumbent contractor.” AR 3084 (emphasis added). Thus,
the Solicitation does not prevent offerors from proposing incumbent personnel as key personnel
or limit offerors to proposing only current employees.

SLI proposed [ ] , a current ZIN Tech employee, to fill its Deputy Program
Manager position, and provided his one-page resume in accordance with the Solicitation
requirements. AR 5572. There was no reason for NASA to question SLI’s representation that [
] would fill the Deputy Program Manager position upon award, and thus there was no
basis to assign SLI a weakness for this aspect of its proposal. See Allied Tech. Grp., Inc. v.
United States, 649 F.3d 1320, 1331 (Fed. Cir. 2011) (Absent “significant countervailing
evidence . . . that should create doubt whether the offeror will or can comply,” the agency may
rely on the offeror’s representations in its bid.). Thus, [ ] position as an employee on
the incumbent contract is not “significant countervailing evidence” showing that [
] is unavailable to SLI. 14

13
ZIN Tech cites to PAE Applied Technologies, LLC v. United States, 153 Fed. Cl. 573,
581-82 (2021), stating that this case stands for the proposition that an “agency rationally rated
protestor ‘unacceptable’ when protestor relied on key personnel employed on incumbent
contract.” ECF No. 28 at 29. ZIN Tech’s case summary, however, does not capture the Court’s
finding in that case. In that case, this Court found that the agency reasonably gave a bidder an
unacceptable rating because the proposal failed to submit letters of intent as required by the
Solicitation and listed key personnel that recently resigned from the incumbent contract. The
facts differ here, however, because [ ] still works on the incumbent contract and,
as ZIN Tech concedes, will “continue to support the program under the SpaceDOC III program.”
ECF No. 28 at 23.
14
In its Response, ZIN Tech cites Conley & Assocs., Inc. v. United States, 142 Fed. Cl.
177 (2019), arguing that the agency in that case rationally rated a protestor “unacceptable” when
the protestor relied on key personnel employed on incumbent contract. ECF No. 35 at 8-9. This,

17
SLI confirmed that [ ] would be available to perform the contract should SLI
receive the award because SLI obtained a letter of commitment from [ ] prior to
proposal submission, confirming his plan to join SLI if SLI won the SpaceDOC III award.
Accordingly, NASA acted in accordance with the Solicitation in accepting [ ] as
one of SLI’s proposed key personnel and rating SLI’s proposal as it did. See Orion Int'l. Tech. v.
United States, 66 Fed. Cl. 569, 573-74 (2005) (finding that it was permissible to propose an
incumbent employee and noting that “[n]o case or board decision cited supports the proposition
that a bidder may not include the name of a potential employee with its bid if the person is
willing to work for the bidder upon award of the contract.”).

B. NASA properly evaluated ZIN Tech’s Key Personnel.

ZIN Tech asserts that ZIN Tech’s proposal “should have received a strength” because it
“proposed ten key personnel, and identified highly-qualified personnel for each position,” while
SLI only identified six key personnel. ECF No. 28 at 22. It is unclear, however, to the Court
what ZIN Tech attempts to allege here because the record shows that ZIN Tech “received a
strength [in MP2] for a complete organization staffed with personnel with well-suited experience
and certifications.” AR 8888.

Although the argument ZIN Tech made in its Motion is unclear, ZIN Tech clarifies its
allegation in its Response, contending that its “proposal should have been given a significant
strength [instead of a strength] for the number, qualifications, and availability of its key
personnel.” ECF No. 35 at 10 (emphasis added). ZIN Tech also argues that its proposal was
objectively superior and deserving of a strength while SLI should have been assessed a
weakness. ZIN Tech concludes that SLI should not have also received a strength for the quality
of the six key personnel identified in its proposal.

The Court agrees with the Government and Intervenor that these arguments are meritless.
Besides pointing out that ZIN Tech offered ten key personnel while SLI offered six, ZIN Tech
does not offer reasons why its proposal deserved a significant strength and why SLI should have
been assessed a weakness. 15 Moreover, the fact that ZIN Tech offered more key personnel than
SLI does not imply that it should have received a significant strength nor that SLI should have
received a weakness. The Solicitation states that the offeror would be evaluated for the
“appropriateness and relevancy of the resumes and/or position descriptions for up to ten key

however, mischaracterizes the facts in Conley. The facts in Conley do not involve key personnel
currently employed by the incumbent. In Conley, the proposed key personnel was recently laid
off and did not execute a contingent offer letter to rejoin the contractor upon contract award. 142
Fed. Cl. at 180. Here, the key personnel, [ ] is currently employed by the incumbent
contractor, and SLI obtained a letter of commitment from [ ] and could expect
that [ ] would be available for performance.
15
ZIN Tech also generally references the availability of the key personnel as a factor
favoring ZIN Tech’s proposal over SLI’s proposal. The Court need not address this issue again
as the Court has examined ZIN Tech’s allegations regarding the availability of SLI’s key
personnel above and found that NASA rationally evaluated this issue.

18
personnel or key positions” it identified, not for the number of key personnel identified. AR
1939,1910; see also AR 1761 (“NASA updated the language in the Final RFP to make it clear
that the Offeror shall identify up to a total of ten key personnel.”). That SLI also received a
strength for the quality of the six key personnel identified in their proposal, therefore, is not
unequal treatment. AR 8885 (“In MP2, the proposed received a strength for an effective multi-
contractor integrated team with highly qualified key personnel in the Program Management
positions.”); see also AR 8586, 8694.

C. NASA properly evaluated ZIN Tech’s Factor 1 Mission Suitability
Subfactors 1 and 3.

The Solicitation contemplates a three-part assessment for each subfactor under Factor 1,
to reach an overall rating. Factor 1, Mission Suitability consists of three subfactors, each
weighted using a total number of points: (1) understanding technical requirements (400 points),
(2) product assurance (200 points), and (3) management plan and approach (400 points). AR
3081-88, 3092. First, NASA assigns an adjectival rating for each of the three subfactors, the two
relevant adjectival ratings here are:

ADJECTIVAL DEFINITION PERCENTILE
RATING RANGE
Excellent A comprehensive and thorough proposal of exceptional 91–100
merit with one or more significant strengths. No
deficiency or significant weakness exists.
Very Good A proposal having no deficiency and which 71–90
demonstrates over-all competence. One or more
significant strengths have been found, and strengths
outbalance any weaknesses that exist.

AR 3079. After assigning an adjectival rating, NASA assigns a percentile and multiplies the
percentage against the total number of points for each subfactor (400 for subfactor 1, 200 for
subfactor 2, 400 subfactor 3) to get a point total. This resulted in the following findings for each
offeror in the final evaluation:

ZIN Tech SLI
Subfactor 1 360 points (90%) – Very Good 368 points (92%) – Excellent
Subfactor 2 122 points (61%) – Good 126 points (63%) – Good
Subfactor 3 360 points (90%) – Very Good 384 points (96%) – Excellent
Total 842 points (84%) – Very Good 878 points (88%) – Very Good

AR 8456-61. Here, ZIN Tech asserts that NASA’s assessment of a “Very Good” rating of its
proposal under subfactor 1, understanding technical requirements, and subfactor 3, management
plan and approach, of the mission suitability Factor is unreasonable because it deserved an
“Excellent” rating instead. ECF No. 28 at 24-25. ZIN Tech believes that it deserved an
“Excellent” rating for both subfactors 1 and 3 because the weaknesses assessed to ZIN Tech
under subfactor 1 were “relatively minor and [do] not [] materially detract from ZIN’s proposal
under this Subfactor.” See, e.g., AR 8883.

19
ZIN Tech further asserts that NASA’s failure to assess an Excellent rating for subfactors
1 and 3 resulted in an overall decrease in ZIN Tech’s rating under Factor 1. AR 3079-80
(percentile range (and therefore total points) is assessed based on the adjectival ratings). Finally,
ZIN Tech contends that NASA’s evaluation relies heavily on the “Excellent” rating assessed to
SLI to conclude that its Factor 1 proposal was superior to ZIN Tech’s. ECF No. 28 at 32.

The issue before the Court, therefore, is to determine whether NASA’s assessment of
“Very Good” instead of “Excellent” for these subfactors lacks a rational basis. Below, the Court
reviews NASA’s evaluation of both subfactors 1 and 3 and then examines whether NASA’s
evaluation of both subfactors is rational.

For subfactor 1, understanding technical requirements, the Source Selection Evaluation
Board (“SSEB”) found that ZIN Tech’s “proposal contained 1 significant strength, 5 strengths,
and 2 weaknesses.” AR 8459. 16 The SSEB concluded that these weaknesses in ZIN Tech’s
proposal are outbalanced by the strengths and that, with no deficiencies, one significant strength,
and demonstrating over-all competence, on subfactor 1 ZIN Tech’s proposal fits the definition of
“Very Good”:

ZIN’s proposal fit the definition for a “Very Good” adjectival rating due to having
no deficiencies, a significant strength, strengths that outbalanced the weaknesses
that exist, and demonstrating overall competence. Because it found that the
strengths clearly outbalanced the weaknesses, the SSEB determined that the
proposal was at the high end of the “Very Good” category, and thus assigned the
proposal a percentile score of 90%.

AR 8461. The SSA concurred:

I find the two weaknesses that ZIN’s proposal received under this Subfactor . . .
to be relatively minor and not to materially detract from ZIN’s proposal under this
Subfactor. While I find ZIN’s proposal to be very strong due to its thorough
response under the Representative Base Order element, I determine that SLI’s
proposal has a slight advantage over ZIN’s proposal under this Subfactor due to the
comprehensive nature of SLI’s proposal.

16
For the first weakness, “[t]he ZIN proposal indicated a lack of understanding of risk
mitigation in representative base orders #1 and #2, and hardware development.” AR 8606
(Finding #8). The SSEB further reported that “[t]he Finding #8 weakness for [subfactors 1 and
3] was partially corrected in the FPR, however, the finding remained a weakness.” AR 8461.16

For the second weakness, the SSEB found that “[t]he ZIN proposal demonstrated an
ineffective approach to managing the Change Control Board (CCB).” AR 8603 (Finding #13).
The SSEB reported that “the note on the [subfactor 3] content was not adequately addressed, so
this Finding remained a weakness and became a [subfactor 3] weakness.” AR 8460.

20
AR 8890-91. For subfactor 3, the SSEB found that ZIN Tech’s “proposal contained 1 significant
strength, 5 strengths, and 1 weakness.” AR 8461. 17 The SSEB concluded that the weakness in
ZIN Tech’s proposal was outbalanced by the strengths of the proposal and that, with no
deficiencies, one significant strength, and demonstrating over-all competence, on subfactor 3
ZIN Tech’s proposal fits the definition of “Very Good”:

Using the definitions of NFS 1815.305 & NASA Source Selection
Guide, the SSEB reached consensus that under the Management Plan and Approach
subfactor, ZIN’s proposal fit the definition for a “Very Good” adjectival rating due
to having no deficiencies or significant weaknesses, a significant strength, strengths
that outbalanced the weakness that exists, and demonstrating overall
competence. Because it found that the strengths clearly outbalanced the weakness,
the SSEB determined that the proposal was at the high end of the “Very Good”
category, and thus assigned the proposal a percentile score of 90%.

AR 8463. The SSA concurred: “In the Management Plan and Approach Subfactor, ZIN’s
proposal is again strong, receiving the rating of Very Good.” AR 8891. The SSA also stated, “I
was most impressed by the significant strength that ZIN’s proposal received under MP6 for
proposing the highly beneficial use of its existing and fully operational office and manufacturing
and assembly facilities located near GRC.” Id. The SSA found “the weaknesses that ZIN
received under this Subfactor for proposing unrealistic Government access to its data
management system to be minor.” Id. In conclusion, “I find SLI’s proposal provides
exceptional technical merit and has a distinct and material advantage over ZIN’s proposal under
the Management Plan and Approach Subfactor.” Id.

It is clear that both the SSEB and the SSA used the proper definition of “Very Good”
when assessing the adjectival ratings for subfactors 1 and 3. The fact that the SSA emphasized
that ZIN Tech’s weaknesses were found to be “relatively minor” does not imply that NASA
should have given ZIN Tech an “Excellent” rating for subfactors 1 and 3. Because the
weaknesses were relatively minor, the SSA determined that the weaknesses were outbalanced by
the strengths. Indeed, the definition of “Very Good” states that the “strengths outbalance any
weaknesses.” AR 3079. It is possible, therefore, for a proposal to not have any weaknesses and
still fall under the definition of “Very Good.” Thus, ZIN Tech’s argument that the subfactors
“Very Good” rating was unreasonable because of the finding that its proposal was “very strong
due to its thorough response” ignores the fact that a “Very Good” rating requires a finding that
the proposal “demonstrates over-all competence.” ECF No. 28 at 25; AR 3079.

Therefore, the SSA’s statements do not, as ZIN Tech asserts, “unequivocally demonstrate
that the Agency should have assessed ZIN Tech an ‘excellent’ rating.” ECF No. 28 at 25. An
excellent rating requires “[a] comprehensive and thorough proposal of exceptional merit with

17
For the weakness, “[t]he ZIN proposal included a description of Government access to
ZIN Data Management System (ZDMS) tools that was not realistic.” AR 8614 (Finding #15).
Although in its FPR, ZIN Tech provided a description of the tools “there was still a lack of
clarity on which tools the Government has access to.” Id. Therefore, the SSEB determined that
this finding remained a weakness. Id.

21
one or more significant strengths.” AR 3079. A very strong proposal can demonstrate “over-all
competence” required for a “Very Good” rating without showing the exceptional merit required
for an “Excellent” rating. Id. Further, the SSA’s finding that subfactor 3 of ZIN Tech’s proposal
was strong and that she was impressed by its significant strength and its many strengths also does
not show that the “Very Good” rating lacks a rational basis. ECF No. 28 at 25. Thus, it was
rational for NASA to assign a “Very Good” adjectival rating to subfactors 1 and 3 of ZIN Tech’s
proposal.

Lastly, the record does not support ZIN Tech’s allegation that NASA’s evaluation
“demonstrates that it relied heavily on the ‘Excellent’ rating” for SLI. ECF No. 28 at 26. On the
contrary, the record shows that both the SSEB and SSA individually analyzed each proposal’s
strengths and any weaknesses and weighed them carefully before making a determination.

Regarding subfactor 1, the SSEB determined that SLI’s “proposal was at the low end of
the ‘Excellent’ category, and the SSEB therefore assigned the proposal a percentile score of
92%.” AR 8457. This closeness is reflected in the SSA’s analysis: “In the Understanding the
Technical Requirements Subfactor, I find both SLI’s and ZIN’s proposals to be very strong in
their technical merit.” AR 8890. Ultimately, the SSA concluded that the strengths that SLI’s
proposal received within each element of this subfactor were “strong and impactful, providing a
comprehensive and well-rounded response.” Id. This gave SLI’s proposal the “slight
advantage” over ZIN’s “very strong” proposal. AR 8891.

Concerning subfactor 3, the SSEB determined that SLI’s proposal “was in the middle of
the ‘Excellent’ category, and therefore assigned the proposal a percentile score of 96%.” AR
8459. Thus, while “ZIN’s proposal is again strong” under this subfactor, the SSA explained, “I
find that [SLI’s] approaches are of exceptional merit and will be significantly impactful to the
Government during contract performance and constitute a material discriminator in favor of
SLI’s proposal under this Subfactor.” AR 8891.

The record, therefore, does not support ZIN Tech’s allegation that in the SSA’s analysis
the adjectival ratings were more important than the quality of the proposals that they represent or
its allegation that the SSEB’s assessments of subfactors 1 and 3 lacked a rational basis. Thus,
the Court holds that NASA’s assessments of subfactors 1 and 3 were rational.

III. NASA’s Factor 3 Past Performance Evaluation Was Reasonable and Complied with
the Solicitation Evaluation Criteria.

Under Factor 3, NASA evaluated offerors’ three areas of relevant experience and past
performance and any Major Subcontractor/Teaming Partners: Past Performance Narrative
(“PPN”), Past Performance Questionnaires (“PPQ”), and Past Performance Databases (“PPD”).
AR 3089. The results of the PPN, PPQ, and PPD evaluations were then considered in
determining the Level of Confidence rating. Id. Relevant to this protest, NASA defined three
levels of confidence: Moderate, High and Very High. AR 3090-91.

ZIN Tech argues that NASA erroneously (1) assigned the highest confidence rating to
SLI’s Volume 3 proposal; (2) failed to validate at least one of SLI’s proposed contracts and

22
erroneously deemed Factor 3 concerns resolved by the unrelated Volume IV of SLI’s proposal;
and (3) treated the Factor 3 proposals differently, in favor of SLI. The Court considers each of
these arguments below.

A. NASA Complied with the Solicitation Requirements in Evaluating OMES
II when Rating SLI Very High Level of Confidence.

ZIN Tech alleges that NASA failed to validate SLI’s Past Performance on the Omnibus
Multidiscipline Engineering Services contract (“OMES II”), 18 which is one of the five contracts
SLI presented in its Past Performance Factor submission showing relevant experience
demonstrating SLI’s ability to meet the requirements of this Solicitation. ECF No. 28 at 27-30,
AR 3723. Therefore, ZIN Tech asserts that NASA should not have awarded SLI a High Level of
Confidence rating. ECF No. 28 at 27-30. ZIN Tech admits that, because NASA could not
access PPD or PPQs for the OMES II contract, the Solicitation required NASA to issue a neutral
rating for OMES II. ECF No. 28 at 27. ZIN Tech further admits that NASA did exactly that—
NASA applied a neutral past performance rating for OMES II, and thus OMES II did not factor
into SLI’s overall Confidence score. ECF No. 28 at 30. Nonetheless, ZIN Tech argues that this
was a “prejudicial error,” concluding that “[h]ad the SSEB validated ratings for OMES II, its
level of confidence rating could have changed.” ECF No. 28 at 30.

In its Cross-Motion, the Government argues that ZIN Tech’s allegations are wholly
unsupported by the record and should be dismissed. The Court agrees. The Solicitation states that
where past performance information is unavailable, NASA will assign a neutral rating. AR 3090
(“Offerors without a record of relevant experience and past performance, or for whom information
18
In its Past Performance Factor submission, SLI gives the following brief description of
its work on the OMES II contract to show its relevance:

SLI provides [NASA’s Goddard Space Flight Center’s (“GSFC’s”)] Engineering
and Technology Directorate (ETD) science mission engineering support that
includes multidiscipline, full-lifecycle services for components, subsystems,
systems, science instruments, spacecraft, International Space Station (ISS)
payloads, GSE, simulators, models, and prototypes. OMES II is highly relevant in
content and complexity. SLI leads a team performing HW and SW development,
I&T, and deployment for spacecraft and observatory projects requiring complex
mechanical and electrical engineering and manufacturing tasks. Work includes
development of new technology, components, subsystems, and instruments to
enable future space and science missions. SLI performs candidate, feasibility, and
systems definition studies; technology development, engineering, and analysis;
preliminary and detailed design; fabrication and assembly; I&T; verification and
validation (V&V); launch and post-launch operations and sustainment; R&T;
procurement and management; documentation; maintenance and sustaining
engineering; performance assurance; and systems safety. SLI supports two major
project offices at NASA/GSFC—NASA’s Exploration and In-Space Services
(NExIS) and the Joint Polar Satellite System (JPSS).

AR 3734.

23
on past performance is not available, shall receive a neutral rating in accordance with FAR
15.305(a)(2)(iv).”). Because NASA could not locate the PPQ and PPD for SLI’s OMES II
experience, NASA calculated the overall Confidence Level rating using the PPQs and PPDs for
the remaining contracts: ETIS II, MEDALS, CMC3, and REMIS. AR 8647-48. ZIN Tech admits
this and even includes excerpts of NASA’s evaluation where NASA explicitly compiled Past
Performance ratings from the contracts besides OMES II. ECF No. 28 at 29. The AR reflects that
the whole of SLI’s Past Performance on these contracts equated to a Very High Level of
Confidence rating. AR 8647-48. Accordingly, ZIN Tech fails to show that NASA deviated from
the Solicitation evaluation requirements or applicable law.

Further, ZIN Tech has not shown that NASA’s treatment of SLI’s Past Performance
ratings prejudiced ZIN Tech in any way in the competition. ZIN Tech does not even argue that
but for NASA’s evaluation of OMES II, ZIN Tech would have won the contract award. Instead,
ZIN Tech generally alleges that “[h]ad the SSEB validated ratings for OMES II, its level of
confidence rating could have changed,” not that SLI’s level of confidence rating would have
changed, demonstrating that ZIN Tech’s allegations are purely speculative. Pl. ECF No. 28 at
30. ZIN Tech does not point to any evidence in record that the OMES II PPQ and PPD ratings
would have lowered SLI’s Overall Confidence rating. Thus, there is no basis to find that the
OMES II Past Performance evaluation prejudiced ZIN Tech.

B. The SSEB’s Consideration of Information Submitted By Offerors in
Response to NASA’s Request For Final Proposal Revisions Was Not
Arbitrary, Capricious, or an Abuse Of Discretion

The record shows that during discussions, NASA requested additional information from
SLI regarding SLI’s subcontractor Leidos’ proposed role on the contract. AR 8507-08. Under a
heading titled, “Past performance,” NASA stated, “Please elaborate on the proposed role of your
Major Subcontractor. The proposal did not clearly identify what specific roles your Major
Subcontractor would perform on the contract so it was difficult for the Government to determine
whether the relevant examples provided were representative of the actual work they would
perform.” AR 5114, 5115, 5132. As a result of these discussions, SLI updated its narrative in
Volume I of its proposal to better address how it planned to use Leidos in its performance, along
with the strength and value it added to SLI’s proposal. AR 5492.

ZIN Tech asserts that the SSEB improperly evaluated SLI’s “past performance by
evaluating a different volume of its proposal.” ECF No. 28 at 30. ZIN Tech alleges that NASA
erred by considering revisions SLI made to Volume I of its FPR as addressing a weakness that
NASA identified during discussions in Volume III of SLI’s proposal. 19 ECF No. 28 at 30-33.

19
ZIN Tech alleges that SLI addressed Leidos’ role in Volume IV of its proposal, but the
AR reflects that SLI added detail about Leidos’ role to Volume I of its proposal. AR 5492. The
added detail aligns with NASA’s findings in its Additional Evaluation of Past Performance
document. AR 8524.

24
The Court agrees with both the Government and Intervenor that NASA acted in
accordance with the Solicitation and applicable law in considering Volume I of SLI’s proposal in
its evaluation.

First, ZIN Tech’s argument that SLI had to submit a FPR to Volume III in response to
NASA’s request for more information about the proposed role of SLI’s major contactor is not
supported by the record. ECF No. 28 at 32. While NASA requested information about the
relationship between SLI and its major subcontractor under a heading titled, “Past performance,”
the request did not state that the revised information had to be placed in Volume III, past
performance information. Id. Further in its letter requesting SLI to submit its FPR, NASA
directed SLI to revise Volume I of its proposal and did not direct SLI to revise Volume III of its
proposal. AR 5141-43. Thus, ZIN Tech’s argument that SLI was required to submit its FPR
under Volume III is not consistent with the record.

Moreover, under the Solicitation, the information requested relates to both Volume I and
Volume III. The Solicitation requires an offeror to include a description of work that it expects
to obtain from a major subcontractor under Volume 1, Mission Suitability, MP 2 Organizational
Structure and Relationship. 20 The information NASA requested from SLI regarding the
proposed role of its major subcontractor, therefore, would be appropriate information suited to
Volume I of SLI’s proposal. The description SLI’s major subcontractor’s work from Volume I
would then be used to make sense of the past performance information in Volume III. AR 5114.
SLI, therefore, submitted a FPR to Volume I and not to Volume III. See, e.g., AR 5492-99.

Second, even if the information had to be addressed in Volume III of SLI’s revised
proposal, the Solicitation would allow NASA to review and consider this information. Here, the
Solicitation contemplated that NASA could consider any information available in evaluating Past
Performance, and that NASA would necessarily reference other Volumes of the proposal in
determining whether subcontractor past performance was relevant to SpaceDOC III:

(e) The Government reserves the right to conduct one-on-one discussions with prior
contracts’ cognizant business and technical personnel, whether or not listed in the
proposal, for both the PPQ and PPD sections. The Government reserves the right
to consider other sources of information available and information available in
Government past performance databases.
...
(h) . . . Subcontractor experience (both for Major Subcontractors and Minor
Subcontractors in accordance with paragraph (f) of this provision) will only be
deemed relevant if the past performance information is deemed relevant to the work
they are assigned in the Offerors’ (and/or Major Subcontractor’s) proposal.

20
“The Offeror shall provide an organizational chart and a narrative description of the
organizations (down to the major discipline letter) to perform the contracted effort.” AR 1909.
Moreover, “[t]his organizational chart and narrative shall include description of work efforts and
percentage of work that the Offeror expects to obtain through joint ventures, teaming, major and
minor subcontracting, or consulting agreements, over the life of the contract.” AR 1909.

25
AR 3090 (emphasis added). NASA could not have determined the relevancy of SLI’s past
performance without looking to the portions of SLI’s proposal that described Leidos’ planned
work. NASA was required to consider all pertinent information related to Past Performance,
regardless if it appeared within or outside of the proposal. See KACE Co., LLC v. United States,
167 Fed. Cl. 192, 208 (2023) (citation omitted) (“Regarding past performance evaluations,
moreover, agencies are not restricted to references submitted by offerors and must draw upon
internal information, even if not cited by the offeror.”).

Further, the Solicitation explicitly addresses NASA’s ability to consider other available
sources related to the past performance of offerors and subcontractors, in conjunction with “the
work they are assigned in the . . . proposal.” AR 3090. Thus, NASA’s consideration of Volume
I, which describes the proposed role of SLI’s major subcontractor, was necessary to review when
evaluating SLI’s Past Performance. Because the Solicitation instructs NASA to review other
sources related to the past performance of offerors and subcontractors, NASA acted consistently
with the Solicitation and applicable law when revieing SLI’s Volume I. See, e.g., Perspecta
Enterprise Sols., LLC v. United States, 151 Fed. Cl. 772, 784 (2020) (upholding contract award
where “the [Agency] determined that prices for certain CLINs were unrealistically low, [but]
looking to the proposal as a whole, determined that [awardee’s] proposed efficiencies explained
why its prices were so low, and, thus, its prices were considered realistic.” (emphasis added)).

IV. NASA did not Engage in the Disparate Treatment of SLI and ZIN Tech with Respect
to Past Performance Cost Overruns.

To prevail on a disparate treatment claim, the protestor must demonstrate that its proposal
was downgraded for a “substantially indistinguishable” deficiency to one in the awardee’s
proposal. Office Design Grp. v. United States, 951 F.3d 1366, 1372 (Fed. Cir. 2020). If the
protestor does not meet this standard, the Court should not second-guess the agency’s
discretionary determinations in its evaluations. See id. at 1373 (“We see no reason to depart
from the Claims Court’s ‘substantively indistinguishable’ standard. If a protestor meets this
threshold, a reviewing court can then comparatively and appropriately analyze the agency's
treatment of proposals without interfering with the agency’s broad discretion in these matters.”).

ZIN Tech asserts that “the Agency disparately treated SLI with respect to cost overruns.”
ECF No. 28 at 33. The Solicitation required offerors to disclose all cost overruns in their Past
Performance examples: “The Offeror shall also identify and explain any cost overruns or
underruns, completion delays, performance problems, terminations and the Offeror’s
implemented corrective actions.” AR 3073. According to ZIN Tech, both proposals “admit
certain cost overruns throughout performance of the proposed contracts. However, only ZIN
Tech’s past performance was downgraded due to concerns regarding cost overruns.” ECF No.
28 at 35 (citing AR 5160). ZIN Tech, however, fails to show disparate treatment regarding the
offerors’ admitted cost overruns for two reasons.

First, the overruns disclosed in SLI’s proposal were materially different and
distinguishable from ZIN Tech’s cost overruns in multiple ways, which warranted the ratings
that NASA assigned to each offeror. ZIN Tech’s admitted cost overrun to complete SoFIE was
16%, while SLI’s highest cost overrun was [ ]. ECF No. 28 at 33-34. Moreover,

26
the SSEB discovered that ZIN Tech received one “marginal rating related to cost” with
comments that included “invoicing issues where costs did not match 535M reports,” there were
insufficient variance [that] explanations made it difficult for NASA to ascertain if the project was
within the planned cost projections, introduced risk to the Government’s budgetary forecast, and
the contactor demonstrated poor budget management during this evaluation period.” AR 5105.
SLI, however, did not receive any marginal ratings regarding its past performance or any similar
comments regarding cost overrun concerns. AR 5090-91; 8870. The offerors, therefore, were
not “substantially similar” with regard to cost overrun concerns.

Second, SLI disclosed all of its relevant cost overruns and its corrective action in
response to any overruns in its Past Performance proposal, Volume III. See AR 3728 (ETIS II),
3733 (MEDALS), 3737 (OMES II), 3742 (CMC3), 3746 (REMIS). By contrast, ZIN Tech
failed to include particular cost overruns in its proposal, and instead NASA discovered the cost
overruns that impacted ZIN Tech’s Overall Confidence rating through investigation of ZIN
Tech’s Past Performance examples. See AR 5160 (“The following adverse past performance
information was discovered outside of the existing CPARS reports for SpaceDOC II that ZIN has
not had an opportunity to respond: . . . Projects are having issues with cost overruns and the
Government has received multiple cost overrun proposals in the last six months.”). Further,
NASA found that ZIN Tech’s explanations of its cost overrun corrective actions did not
sufficiently explain how ZIN Tech would prevent similar overruns in the future. AR 8655.
NASA had no similar concerns regarding SLI’s proposal. These differences in SLI and ZIN
Tech’s proposals demonstrate that the cost overruns at issue were not “substantively similar,”
and NASA acted within its discretion in treating them differently in its Past Performance
evaluation.

Thus, ZIN Tech’s disparate treatment claim fails here because ZIN Tech has not shown
that the SSEB downgraded its past performance due to cost overrun concerns that were
substantially similar to SLI’s admitted cost overruns, and ZIN Tech also fails to show that the
SSEB engaged in disparate treatment regarding cost overruns. See Office Design Grp., 951 F.3d
at 1372 (To prevail on a disparate treatment claim, the protestor must demonstrate that its
proposal was downgraded for a “substantially indistinguishable” deficiency to one in the
awardee’s proposal.).

V. The OHA Properly Held that SLI is an Eligible Small Business for this Procurement.

This Solicitation provides for a 100% small business set-aside with a size standard of
1,000 employees. 21 AR 13148. To bid on a contract, a concern must self-certify that it meets the
size standard for the particular solicitation. 13 C.F.R. § 121.405(a) (2020). On May 2, 2023, 22

21
Pursuant to its statutory authority, the SBA sets size standards that determine if a
business concern is eligible for “[g]overnment programs and preferences reserved for ‘small
business’ concerns.” 13 C.F.R. § 121.101 (2023).
22
The size of a concern is determined as of the date when the concern submits a written
self-certification. 13 C.F.R. § 121.404(a) (2023).

27
SLI submitted its self-certification to the Area Office that it meets the small business size
standard. AR 12354, 13132. SLI’s self-certification also explains that SLI is a minority member
of two populated 23 joint ventures, 24 HX5 Sierra and NAS. 25 AR 12354, 13132.

Here, ZIN Tech asserts that the OHA’s decision erred by: (1) ignoring evidence that
mandates a finding of affiliation on the basis of common ownership and management; (2)
ignoring evidence that mandates a finding of affiliation on the basis of a longstanding inter-
relationship between the same joint venture partners; and (3) applying 13 C.F.R. § 121.103(h) to
calculate SLI’s employee count and finding that SLI is an eligible small business concern. The
Court addresses each of these arguments below.

A. The OHA Did Not Ignore Evidence that Mandates a Finding of Affiliation
on the Basis of Common Ownership and Management.

In its Motion, ZIN Tech argues that the OHA ignored evidence that SLI and NAS are
affiliated based on common management because SLI’s Chief Operating Officer sits on the Board
of Managers for NAS, as the “SBA considers factors such as ownership, management, previous
relationship with or ties to another concern, and contractual relationship, in determining whether
affiliation exists.” ECF No. 45 at 18 (citing 13 C.F.R. 121.103(a)(2) (emphasis added)).

To support this argument, ZIN Tech points to SLI’s SBA Form 355 which names [
] as the Chief Operating Officer, Corporate Secretary, and [ ] in SLI. 26 AR

23
A populated joint venture is “where work is performed by the joint venture entity itself
and not by the individual joint venture partners.” 13 C.F.R. § 121.103(h)(4) (2024).
24
The other member of HX5 Sierra is HX5, LLC, and the other member of NAS is
Bechtel National, Inc. (“BNI”). AR 12537.
25
SLI also provided the SBA with joint venture operating agreements (“JVOAs”) and
other information such as a U.S. Government Accountability Office ruling referring to NAS as a
joint venture. See generally AR Tab 75.
26
ZIN Tech argues that the OHA refused to admit evidence that a manager at SLI is also a
manager at the joint ventures. The OHA, however, did not ignore the evidence but found that the
evidence was new on appeal, and thus, inadmissible:

Appellant has submitted new evidence for consideration on appeal, i.e., Exhibits G
and H, Industry Day participants and SLI’s COO’s LinkedIn profile, respectively.
It is undisputed that this evidence was not presented to the Area Office. New
evidence will not be considered unless the Judge on his or her own motion orders
the submission of such evidence, or a motion is filed and served establishing good
cause for the submission of such evidence. 13 C.F.R.§ 134.308(a). OHA’s review
is based upon the evidence in the record at the time the Area Office made its
determination. Evidence that was not previously presented to the Area Office is
generally not admissible and OHA will not consider it. Further, OHA will not
consider new evidence where the proponent unjustifiably fails to submit the

28
12348. In response to Question #9b of Form 355, whether a listed owner, officer or Board
member of SLI is also an owner, officer, director, manager, or employee of another business, SLI
acknowledged that [ ] was a Manager for NAS, a Manager for HX5 Sierra, a Manager
for HX5-Sierra Lobo JV, LLC, and a Member and Secretary for [ ]. AR 12349, AR
12353.

Further, ZIN Tech asserts that the OHA ignored its argument that SLI and NAS are
affiliated based on common management. Regarding this argument, the OHA found that,

The next set of arguments, from SLI being and NAS being affiliated based upon
common management, SLI being economically dependent on NAS, to SLI and
NAS being affiliated under the totality of the circumstances, are new arguments on
appeal and based upon new evidence and/or speculation. Thus, I will not consider
them here. 13 C.F.R. §§ 134.308(a), 134.316(c).

AR 13144. ZIN Tech, however, has not shown that it raised this argument with any specificity
in its size protest before the Area Office, so it was not an error of law for the OHA to find that
ZIN Tech’s argument was new on appeal and to dismiss that argument as a result. See
Ideogenenics LLC v. United States, 138 Fed. Cl. 672, 706 (2018) (finding OHA’s decision to
exclude new evidence consistent with regulation and controlling precedent). Further, this Court
holds that the OHA’s correctly dismissed this argument because its decision is based upon the
factual record developed before the Area Office, and thus, any new evidence or arguments
brought before the OHA on appeal are not properly before the OHA. See 13 C.F.R. § 134.316(c)
(“The Judge will not decide substantive issues raised for the first time on appeal, or which have
been abandoned or become moot.”); Oxyheal Med. Sys., Inc., SBA No. SIZ-5707, 2016 SBA

evidence during the size review. Size Appeal of Rocky Mountain Medical
Equipment, LLC, SBA No. SIZ-6129, at 12 (2021). Here, Appellant could have
submitted this evidence to the Area Office but did not do so. Furthermore,
Appellant failed to file and serve a motion establishing good cause for the
admission of such evidence. Sections II.B and II.C, supra. Accordingly, I
EXCLUDE Appellant’s Exhibits G and H from the record. I also DENY SLI’s
Motion to Supplement the Record and EXCLUDE SLI’s proffered new evidence,
which also was available at the protest stage.

AR 13141. Thus, the Court holds that the OHA did not err by ignoring evidence, as this
evidence was new on appeal. See Ideogenenics LLC, 138 Fed. Cl. at 706 (finding OHA’s
decision to exclude new evidence consistent with regulation and controlling precedent).
Further this evidence does not appear to be relevant to the argument ZIN Tech is raising
because ZIN Tech also states this evidence “merely reflected information that ZIN Tech
expected, and the record confirms, was already present in Sierra Lobo’s Form 355 response
to the original protest but [allegedly] ignored by SBA.” ECF No. 45. at 11 (“OHA didn’t
need to rely upon those sources because that information was already disclosed in Sierra
Lobo’s Form 355 response.”). Thus, even if the OHA erred by not admitting this new
evidence on appeal, which it did not, the error would have been harmless.

29
LEXIS 8, 2016 WL 692818, at *8 (Jan. 19, 2016) (“OHA’s review is based upon the evidence in
the record at the time the Area Office made its determination.”)

The Court agrees with Intervenor that this Court need not consider this argument on the
merits as it was not properly before the OHA on appeal. 27 Swift & Staley, Inc. v. United States,
159 Fed. Cl. 494, 503 (2022) (considering whether an argument was “was properly before OHA
on appeal” before evaluating the argument on the merits); Elmore v. DOT, 421 F.3d 1339, 1342
(Fed. Cir. 2005) (“We have recognized that a litigant who fails properly to raise an issue before
an administrative agency ordinarily is precluded from litigating that issue before us.”); Palladian
Partners, Inc. v. United States, 783 F.3d 1243, 1261 (Fed. Cir. 2015) (quoting Weinberger v.
Salfi, 422 U.S. 749, 765 (1975) (Plaintiff’s “failure to present this argument in the pending OHA
appeal deprived the agency of ‘an opportunity to correct its own errors, to afford the parties and
the courts the benefit of its experience and expertise, and to compile a record which is adequate
for judicial review.’”); Team Waste Gulf Coast, LLC v. United States, 135 Fed. Cl. 683, 687
(2018) (holding that arguments not presented to the OHA have been waived).

Even if the Court held that the OHA erred by not considering this argument, a review of
other OHA decisions show that this alleged error would not have changed the outcome of the
case, i.e. the OHA would have found that SLI was still considered small. Baird Corp. v. United
States, 1 Cl. Ct. 662, 666 (1983) (This Court affords “special deference” to decisions by the
OHA due to the SBA’s “quasi-technical administrative expertise and a familiarity with the
situation acquired by long experience with the intricacies inherent in a comprehensive regulatory
scheme.”); Precise Sys., Inc. v. United States, 122 Fed. Cl. 263, 270 (2015) (citing LB & B
Assocs., Inc. v. United States, 68 Fed. Cl. 765, 772 (2005)) (the Court defers to “OHA’s
interpretation of its own precedent, provided [that] the OHA’s interpretation is rational and
reasoned[.]”).

27
In its Reply, ZIN Tech argues that the OHA failed to properly find SLI was affiliated
with HX5 and NAS under the totality of the circumstances test for affiliation. ECF No. 51 at 9;
see 13 C.F.R. §121.103(a)(5) (“In determining whether affiliation exists, SBA will consider the
totality of the circumstances, and may find affiliation even though no single factor is sufficient
to constitute affiliation.” (emphasis added)). The OHA found that ZIN Tech’s argument that
“SLI and NAS [are] affiliated under the totality of the circumstances, [is a] new argument[] on
appeal and based upon new evidence and/or speculation. Thus, I will not consider them here.”
AR 13144 (citing 13 C.F.R. §§ 134.308(a), 134.316(c)). For the same reasons given above, this
Court need not consider this argument on the merits as it was not properly before the OHA on
appeal. However, even if this Court did consider this argument on the merits, the Court would
still hold that SLI and NAS are not affiliated under the totality of the circumstances. ZIN Tech
asserts that “all of the[] points [made in its Motion] demonstrate that OHA failed to properly find
SLI was affiliated with HX5 and NAS under the totality of the circumstances test for affiliation.”
ECF No. 51 at 16. Because the Court has reviewed the points made in ZIN Tech’s brief and has
found that all of ZIN Tech’s arguments fail to show that SLI and NAS are affiliated, combining
ZIN Tech’s arguments under the totality of the circumstances test would not change this
outcome.

30
Indeed, the OHA has found that for an individual “to be considered management for the
purposes of common management affiliation, he would have to exercise critical influence or
substantive control over [the concern’s] operations and be part of the firm’s overall
management.” Size Appeal of Lukos, LLC, SBA No. SIZ-6047 (2020) (citing Size Appeal of
Hardwire, LLC, SBA No. SIZ-5983, at 6 (2019)). Other than merely pointing to the fact that [
] sits as one of the [ ] managers on NAS’s Board of Managers, ZIN Tech does
not point to any evidence supporting that [ ] had critical influence or control of the
concern. See AR 12623, 12677.

Under the OHA’s precedent, the mere fact that [ ] “sits on the Board of
Managers” for NAS does not establish that he has the ability to exercise substantive control over
both SLI and NAS. “Where an individual is only one of a number of directors, OHA has held
that he would not have had critical influence or control of the concern.” Size Appeal of Point
Blank Enters., Inc., SBA No. SIZ-5982 (2019) (citing Size Appeal of Cambridge Int’l. Sys., Inc.,
SBA No. SIZ-5516, at 6 (2013)). Thus, even if the OHA erred in failing to consider this basis
for affiliation on the merits (which it did not), any such error was harmless because the scant
evidence proffered by ZIN Tech does not prove that such affiliation exists.

B. The OHA Did Not Ignore Evidence that Mandates a Finding of Affiliation
based on a Longstanding Inter-Relationship Between the Same Joint
Venture Partners.

ZIN Tech asserts that the OHA ignored evidence that NAS represents a longstanding
inter-relationship between the same joint venture partners that mandates a finding of general
affiliation. To support this argument, ZIN Tech contends that the sheer magnitude and duration
of the work awarded to NAS somehow negate NAS’ joint venture status. ECF No. 45 at 20.
ZIN Tech also points to SLI’s press release which said that NAS had “1802 Team Members”
performing over $1.5 billion of work awarded in 2015. AR 13044. ZIN Tech also emphasizes
that NAS’s “total contract value was initially $181,179,220 and has been modified to
$2,511,306,705.77.” AR 13046; ECF No. 45 at 13.

ZIN Tech, however, does not cite authority for its claim that the magnitude or duration of
a single contract somehow renders the joint venture members affiliated. 28 Further, ZIN Tech
does not dispute that NAS “has been awarded one contract.” 29 AR 12701. Moreover, ZIN Tech

28
ZIN Tech also argues that NAS cannot be considered a joint venture because it “was
established on a continuing, unlimited basis.” ECF No. 45 at 19. ZIN Tech refers to the
preamble of a rule that the SBA published on April 27, 2023, effective May 30, 2023, “SBA has
consistently stated its view that a joint venture is not an on-going business entity, but rather
something that is formed for a limited purpose and duration.” See 88 Fed. Reg. 26164, 26165,
Ownership and Control and Contractual Assistance Requirements for the 8(a) Business
Development Program. The Court agrees with the OHA that this rule does not apply in this
protest because it did not become effective until May 30, 2023, which was after the date of SLI’s
self-certification on May 2, 2023.
29
SLI’s submissions to the Area Office showed that each populated joint venture was

31
has not cited any authority to support its assertion that modifications of a joint venture’s single
contract could lead to a finding of general affiliation between and among the partners. The focus
of the joint venture, after all, remains the single contract even if it has been modified and
extended.

Contrary to ZIN Tech’s assertion, the OHA fully considered that SLI and BNI have only
formed one joint venture, NAS, and at the relevant date to determine size, NAS has only been
awarded one contract. AR 13126. The OHA found,

Appellant’s argument that NAS represents “a longstanding inter-relationship or
contractual dependence between the same joint venture partners [that] will lead to
a finding of general affiliation” fails as unsubstantiated. In fact, one joint venture
between two firms is not enough to support a finding of affiliation. Size Appeal of
DCT, Inc., SBA No. SIZ-4996 (2008). OHA has only found affiliation under this
ground when there have been numerous contracts awarded to the joint venture in
question. See. e.g. Size Appeal of Robert M. Gomez & Assoc., Inc., SBA No. SIZ-
3921 (1994); Size Appeal of Team Contracting, Inc., SBA No. SIZ-3875 (1994).
Where there is only one contract here, there is no support for finding SLI affiliated
with NAS on such ground.

AR 13144. The OHA’s analysis is sound. While 13 C.F.R. § 121.103(h) provides that a
“longstanding inter-relationship or contractual dependence between the same joint venture
partners will lead to a finding of general affiliation between and among them,” there must be a
significant number of joint ventures or contracts between the same parties for affiliation to arise.
For example, in Team Contracting, Inc., SBA No. 3875 (1994), general affiliation was found
between joint venture partners where the joint venture had performed nineteen contracts.
Likewise, in Robert M. Gomez & Associates, Inc., SBA No. 3921 (1994), the joint venture
received at least fourteen contracts. Yet, in Size Appeal of Quality Servs. Int’l, LLC, SBA No.
SIZ-5599 (2014), the OHA found no error in the area office’s determination that eight joint
ventures formed between the same entities that had been awarded fifteen contracts did not rise to
the level of general affiliation. Here, NAS bid on and was awarded one contract. ZIN Tech fails
to point to any OHA case or SBA regulation that mandates a finding of general affiliation
between SLI and BNI because they have formed one joint venture that has received one contract
award.

In addition, ZIN Tech asserts that the OHA ignored evidence that NAS violated the “rule
of two,” where joint venture partners will be found affiliated when the joint venture submits an
offer after two years from the date of the first award under 13 C.F.R. § 121.13(h). ZIN Tech
alleged before the OHA that NAS was an ongoing concern intending to bid on the follow-on to
its nearly decade-long and over $2.5 billion Air Force Test Operations Sustainment (“TOS”)
contract designated TOS II. AR 12966. [ ]. AR 12528-29. The OHA
found that ZIN Tech’s argument:

formed to compete for, and has performed on, only one contract. AR 12537.

32
is merely speculative and without supporting evidence of such an offer to support
it. There is no evidence of any second offer from NAS. Appellant’s speculations as
to offers NAS could make are also irrelevant, as nothing had happened as of the
date to determine size.

AR 13144. ZIN Tech does not dispute that, as the OHA correctly observed, as of the date to
determine size, May 2, 2023, the joint venture had not submitted an offer after two years from
the date of first award. ECF No. 45 at 13 (citing AR 12528-529). [
], ZIN Tech has not shown any violation of the two-year rule or other longstanding
relationship that would render SLI and BNI affiliated as of May 2, 2023. See Size Appeal of
Precision Asset Mgmt. Corp. & Q Integrated Cos., SBA No. SIZ-5781 (2016) (“OHA has held in
a host of cases that events occurring after the date to determine size are not relevant in a size
determination.”) (citations omitted). Thus, the OHA’s finding that there was no longstanding
inter-relationship between NAS and SLI requiring a finding of general affiliation between the
joint venture partners was not arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law. Precise Sys., Inc., 122 Fed. Cl. at 269.

C. The OHA Did Not Commit Legal Error by Applying 13 C.F.R. § 121.103(h)
to Calculate SLI’s Employee Count and Finding that SLI is a Small
Business.

ZIN Tech argues that the OHA erred in its interpretation of 13 C.F.R. § 121.103(h)
(2023), and instead the OHA should have relied on an interpretation from a previous version of
the regulation 30 that was discussed in a case before this court, Swift & Staley, Inc. v. United
States, 155 Fed. Cl. 630, 636 (2021). ZIN Tech cites 13 CFR 121.103(h), arguing that under this
regulation NAS should not be considered a proper joint venture because NAS is a populated
joint venture. ECF No. 45 at 19. Besides stating this allegation, ZIN Tech does not support its
argument. See generally, ECF No. 45. Although both NAS and HX5 Sierra are populated joint
ventures, it appears that ZIN Tech only takes issue with NAS’ affiliation as a joint venture
partner.

The issue before the Court therefore is whether the OHA’s interpretation of 13 C.F.R. §
121.103(h) to calculate a proportionate share of HX5 Sierra’s and NAS’s employees, both of
which are populated joint ventures, in SLI’s total employee count was arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law. Precise Sys., Inc., 122 Fed. Cl. at
269.

First, to determine whether the OHA’s interpretation of 13 C.F.R. § 121.103(h) was an
error of law, the Court must review the OHA’s decision. The OHA reviewed the Area Office’s

30
It is important to note at the outset that the applicable regulation to calculate the size of
a concern that is a partner to a joint venture are those that were in effect on May 2, 2023, the date
of SLI’s initial offer and self-certification. See 13 C.F.R. § 121.404(a) (2023) (“SBA determines
the size status of a concern, including its affiliates, as of the date the concern submits a written
self-certification that it is small to the procuring activity as part of its initial offer or response
which includes price.”); AR 12701, 13125.

33
size determination, which found that SLI is an eligible small business as its employee count does
not exceed the 1,000-employee limitation. The Area Office examined SLI’s relationship as a
member of two populated joint ventures with HX5 Sierra and NAS and relying on Swift and
Staley, Inc., 155 Fed. Cl. at 636, found neither HX5 Sierra nor NAS is “a valid joint venture”
because both are populated joint ventures. AR 12702 (citing Size Appeal of Swift & Staley, Inc.,
SBA No. SIZ-6125 (2021) (remand)); see Swift & Staley, Inc., 155 Fed. Cl. at 636 (holding that a
business need not include its proportionate share of receipts from populated joint ventures when
determining its individual size status). Accordingly, the Area Office conducted a general
affiliation analysis between SLI and the two populated joint ventures, and the Area Office found
that HX5 Sierra is affiliated with SLI and that SLI was not affiliated with NAS, and therefore
aggregated the number of employees for SLI and its affiliate, HX5 Sierra. AR 12702. The Area
Office concluded that SLI is a small business as its size does not exceed the 1,000-employee size
standard. AR 12703-07.

While the OHA affirmed the Area Office’s conclusion that SLI is an eligible small
business, it did not agree with the Area Office’s analysis and employee count calculation. The
OHA held that although the Area Office’s error was ultimately harmless, as the matter would reach
the same result that SLI was a small business, the Area Office incorrectly relied on Swift & Staley,
Inc., 155 Fed. Cl. at 630.

In Swift, this Court held that the regulations in effect at the time of the plaintiff’s self-
certification, an affiliated joint venture did not meet the requirement of 13 C.F.R. § 121.103(h)
that joint ventures “may not be populated,” and, thus the affiliated joint venture did not qualify
for treatment as a joint venture under Paragraph (h) and its subparagraphs. Swift, 155 Fed. Cl. at
635-36. This Court emphasized the language in the regulation, that “[f]or the purposes of this
provision … a joint venture … may not be populated . . . .” Swift & Staley, Inc., 155 Fed. Cl. at
636 (emphasis in original).

The OHA pointed out that after the Swift and Staley decision, the SBA revised the
regulation and, as of the date of SLI’s initial offer, the analysis in Swift and Staley no longer
applies to the revised regulation, “‘[f]or size purposes, a concern must include in its receipts its
proportionate share of joint venture receipts (whether that joint venture is populated or
unpopulated).’” AR 13124 (quoting 13 C.F.R § 121.103(h)(4)). The OHA continued by
explaining that “[a]fter this regulatory revision, any size determination must include in the
calculation of the concern’s size, its proportionate share of the receipts or employees of any joint
venture to which it is a partner, whether that joint venture is populated or unpopulated.” AR
13125. The OHA further explained that the regulatory revision applies to the size determination
because “[t]he applicable regulations are those in effect on the date to determine size.” Id.
(citing Size Appeal of Rocky Mountain Medical Equipment, LLC, SBA No. SIZ-6129 (2021)).
The date of SLI’s initial offer was May 2, 2023. Id. (citing 13 C.F.R. § 121.404(a)).
Accordingly, the OHA concluded that the “regulations on that date were not the same regulations
in effect on the date to determine size in the Swift & Staley cases, but those in place now as a
result of the revisions of 2020 and 2022.” Id. Given the date of the initial offer and the rule that
the governing regulation is that which was in effect when the initial offer was submitted, the
OHA explained that:

34
Therefore, on the date for determining size, SBA’s regulations clearly required that
a concern which was a partner to joint ventures include in its calculation of its
number of employees or annual receipts its proportionate share of the employees or
annual receipts of its joint ventures, whether they were populated (having their own
employees) or unpopulated. A concern is not an affiliate of a joint venture of which
it is a member. Size Appeal of Barlovento, LLC, SBA No. SIZ-5191 (2011); 87
Fed. Reg., at 381.

AR 13125-26. Given this, the OHA also found that “the Area Office thus erred in conducting a
general affiliation analysis of HX5 Sierra and NAS, and concluding HX5 Sierra was affiliated with
SLI, including all of its employees in the calculation of SLI’s size and NAS was not an affiliate,
excluding any of its employees in its calculation.” AR 13126. Applying the revised regulation,
the OHA reasoned that “SLI’s size must be calculated by a number of employees of both HX5
[Sierra] and NAS equal to SLI’s percentage ownership in each joint venture.” Id. Accordingly,
the OHA considered the record relating to the percentage of employees for each joint venture to
which SLI is a partner:

That is, based upon the record before the Area Office, [ of the
employees of HX5 Sierra, and [ of the employees of NAS. The
Employee Calculation Worksheet SLI submitted contains this information, as part
of its calculation of its employees. A review of this shows that SLI’s total number
of employees under the correct calculations is well within the applicable size
standard. Accordingly, I conclude the Area Office’s error here was ultimately
harmless, as the matter would reach the same result, that SLI was a small business.
Size Appeal of OSG, Inc., SBA No. SIZ-5178, at 8 (2016). Id. Thus, the OHA
affirmed the Area Office’s Size Determination.

AR 12979. For the reasons given below, the Court holds that the OHA did not err in its analysis
that the revised statute explains that a joint venture member submitting an offer for a small
business contract should calculate a proportionate share of its affiliated joint venture employees,
regardless of whether the affiliated joint ventures are populated or unpopulated, to its total
employee count.

This Court construes a regulation in the same way as a statute. Tesoro Haw. Corp. v.
United States, 405 F.3d 1339, 1346-47 (Fed. Cir. 2005) (citing Bowles v. Seminole Rock & Sand
Co., 325 U.S. 410, 414-15, 65 S. Ct. 1215, 89 L. Ed. 1700 (1945)). The Court’s analysis of a
regulation begins with the plain language of the regulation. See Barnhart v. Sigmon Coal Co.,
534 U.S. 438, 459, 122 S. Ct. 941, 151 L. Ed. 2d 908 (2002) (“As in all statutory construction
cases, we begin with the language of the statute.”). The Court considers “the plain language of
the regulation, the common meaning of the terms, and the text of the regulation both as a whole
and in the context of its surrounding sections.” Aqua Prods., Inc. v. Matal, 872 F.3d 1290, 1316
(Fed. Cir. 2017). The Court turns to the plain language of the relevant regulations in effect when
SLI submitted its self-certification on May 2, 2023. See 13 C.F.R. § 121.404(a); AR 3175.
Section 121.103 provides in relevant part:

35
(h) Receipts/employees attributable to joint venture partners. For size purposes, a
concern must include in its receipts its proportionate share of joint venture receipts
(whether that joint venture is populated or unpopulated), unless the proportionate
share already is accounted for in receipts rejecting transactions between the concern
and its joint ventures (e.g., subcontracts from a joint venture entity to joint venture
partners). In determining the number of employees, a concern must include in its
total number of employees its proportionate share of joint venture employees
(whether the joint venture is populated or unpopulated).
....
A joint venture: Must be in writing; must do business under its own name and be
identified as a joint venture in the System for Award Management (SAM) for the
award of a prime contract; may be in the form of a formal or informal partnership
or exist as a separate limited liability company or other separate legal entity; and,
if it exists as a formal separate legal entity, may not be populated with individuals
intended to perform contracts awarded to the joint venture (i.e., the joint venture
may have its own separate employees to perform administrative functions,
including one or more Facility Security Officer(s), but may not have its own
separate employees to perform contracts awarded to the joint venture).

13 C.F.R. § 121.103(h) (in effect on May 2, 2023).

In the revised regulation, the SBA removed the “for the purposes of this provision”
language, which was important to this Court’s ruling in Swift and Staley, effective on November
16, 2020, as the language indicated to the Court that the definition of a joint venture applied to
the entire provision, both for a joint venture submitting a bid for the prime contract and its joint
venture partners. 85 Fed. Reg. 66146, 66148 (Oct. 16, 2020). SBA made further changes
effective January 5, 2022, amending 13 C.F.R. § 121.103(h) to include language requiring that to
calculate a concern’s size, a concern must include in its count of receipts or employees its
proportionate share of its joint venture receipts or employees, whether the joint venture is
populated or unpopulated. 87 Fed. Reg. 380, 381 (Jan. 5, 2022) (emphasis added). The other
crucial change in the regulation, is the addition of the language, “for the award of a prime
contract” as it regards the definition of a joint venture. The addition of this language further
shows that the definition of a joint venture in this provision is relevant as to the bidding entity for
award of a prime contract and not for the definition of the prime contractor’s joint venture
partners. 31 Thus, the regulation in effect at the time of SLI’s self-certification on May 2, 2023,
was materially different from the regulation at issue in Swift & Staley.

31
ZIN Tech argues in its Reply that the version of 13 C.F.R. § 121.103(h) in effect
before, during and after SLI submitted its proposal has said a joint venture “may not be
populated with individuals intended to perform contracts awarded to the joint venture.” ECF No.
51 at 9. Although the language defining a “joint venture” is the same in both versions of the
regulation, the revised regulation only applies the definition of “joint venture” to the bidding
entity for the prime contract instead of applying the definition to the entire provision as it did in
Swift. See Swift & Staley, Inc., 155 Fed. Cl. at 636 (emphasis in original) (The Court emphasized
the language in the regulation, that “[f]or the purposes of this provision … a joint venture . . .
may not be populated . . . .”).

36
Moreover, the SBA also clarified the meaning and purpose of 13 C.F.R. § 121.103(h) in
the preamble to the revised regulation,

It is well established that business concerns are not affiliates of joint ventures of
which they are members for size purposes. … [s]ince 2004, SBA regulations have
required a joint venture partner to include its proportionate share of joint venture
receipts and employees in its receipts and employee count, respectively. . . . The
final rule of October 16, 2020, revised § 121.103(h) to clarify how a joint venture
partner must calculate its proportionate share of joint venture receipts and
employees for purposes of determining its own size status. Specifically, the final
rule provided that the joint venture partner must include its percentage share of joint
venture receipts and employees in its own receipts or employees.
…
It has come to SBA’s attention that some have misinterpreted the intent of the final
rule. Specifically, because the regulations no longer allow joint ventures to be
populated with individuals intended to perform small business set-aside contracts
awarded to the joint venture, some have reasoned that a joint venture populated
with its own separate contracting-performing employees does not qualify as a joint
venture for all SBA program purposes. From this logic, it ostensibly follows that a
joint venture partner need not include in its own receipts its proportionate share of
receipts and employees from populated joint ventures. This was not SBA’s intent.
…
Nothing, however, in the final rule or the 2016 rulemaking signaled a change in
policy concerning the treatment of receipts and employees from populated joint
ventures for purposes of determining a joint venture partner’s size. … [i]t is
irrelevant whether the joint venture partner’s proportionate share of receipts and
employees are from populated or unpopulated joint ventures. Thus, while populated
joint ventures are no longer eligible to submit offers for small business contracts,
receipts and employees from populated joint ventures are still attributable to the
underlying joint venture partners for size purposes. This rule corrects the above
misconception by clarifying that a concern must include in its receipts and
employee count its proportionate share of joint venture receipts and joint venture
employees, respectively, regardless of whether the joint venture is populated or
unpopulated.

87 Fed. Reg., at 381 (emphasis added). Thus, it is clear that after the Swift and Staley case was
decided, the SBA’s revised regulation now supports the finding that a joint venture partner
submitting an offer for a small business contract should calculate a proportionate share of its
affiliated joint venture employees, regardless of whether the affiliated joint ventures are
populated or unpopulated, to its total employee count. This Court agrees with the OHA’s
analysis of the revised regulation and holds that the applicable regulation clarifies the SBA’s
intent and unambiguously explains how a joint venture partner should calculate its receipts and

37
employees for size purposes. 32 After this regulatory revision, any size determination must
include in the calculation of the concern’s size, its proportionate share of the receipts or
employees of any joint venture to which it is a partner, whether that joint venture is populated or
unpopulated.

Finally, ZIN Tech argues that the OHA erred in not finding general affiliation between
SLI and HX5 Sierra or NAS and that this resulted in an improper size calculation. ZIN Tech
asserts that under the general principles of affiliation, the OHA should have also calculated the
average total employees of each alleged affiliate. See 13 C.F.R. § 121.103(a)(6); 13 C.F.R. §
121.106. ZIN Tech concludes that if “the Agency had properly done so here, Sierra Lobo’s [
employees plus HX5 Sierra’s [ ] employees plus NAS’s full average of [ ] employees would
equal [ ] employees.” ECF No. 45 at 24-25.

Although ZIN Tech seems to argue that the OHA did not consider its arguments of
general affiliation, for the reasons detailed in this opinion, this assertion fails. See supra pp. 28-
33. The OHA addressed each argument that ZIN Tech properly brought before the OHA and
considered whether the evidence would cause the joint venture partners to be found affiliated.
AR 13144 (“While Appellant raises arguments that might cause the partners to a joint venture to
be found affiliated . . .”). The OHA’s application of the joint venture affiliation regulation, 13
C.F.R. § 121.103(h), to calculate SLI’s joint venture partner employees did not mean that the
OHA disregarded the general principles of affiliation. Because the OHA considered the
evidence presented by ZIN Tech and found that SLI is a joint venture partner with HX5 Sierra
and NAS, the OHA found that the general principles of affiliation do not apply, as “A concern is
not an affiliate of a joint venture of which it is a member.” AR 13144, Consolidation of Mentor
Protégé Programs & Other Gov’t Contracting Amends. Correction, 87 Fed. Reg. 380-01, 381
(Jan. 5, 2022) (“It is well established that business concerns are not affiliates of joint ventures of
which they are members for size purposes.”).

Because all of ZIN Tech’s allegations of general affiliation fail, as detailed in this
opinion, and because HX5 Sierra and NAS are valid joint ventures, there is no basis for any
general affiliation analysis between SLI and either HX5 Sierra or NAS. Thus, it was proper for
the OHA to apply 13 C.F.R. § 121.103(h) to calculate SLI’s employee count. Again, SLI was

32
ZIN Tech also argues that the OHA’s determination that Swift & Staley had been
overturned is legal error. ECF No. 45 at 16. According to ZIN Tech, the OHA’s application of
the proportionate share of employees’ provision is a “sweeping conclusion” that “writes out the
rest of SBA’s regulations concerning affiliation.” ECF No. 45 at 16. This Court in Swift &
Staley held that this provision applies to only unpopulated joint ventures. 155 Fed. Cl. at 636.
The SBA’s regulatory revision did not overturn Swift & Staley but instead clarified that “[i]n
determining the number of employees, a concern must include in its total number of employees
its proportionate share of joint venture employees (whether the joint venture is populated or
unpopulated).” 13 C.F.R. § 121.103(h) (emphasis added). The OHA’s determination that the
interpretation of 13 C.F.R. § 121.103(h) in Swift & Staley no longer applies after the regulatory
revisions did not, as ZIN Tech argues, render null “all other bases of affiliation.” ECF No. 45 at
16. Rather, it clarified the specific regulation regarding how to calculate the joint venture
employees of a joint venture partner submitting an offer for a small business contract.

38
the bidding entity, so the only question under 13 C.F.R. § 121.103(h) is what portion of HX5
Sierra’s and NAS’ employees are included in SLI’s size calculation. ZIN Tech alleges, without
any support, that in calculating SLI’s size, “OHA should have also calculated the average total
employees of each alleged affiliate.” ECF No. 45 at 24. SLI is not generally affiliated with
either HX5 Sierra or NAS. Accordingly, in calculating SLI’s size, the relevant question is the
number of SLI’s employees, together with its proportionate share of joint venture employees.
See 13 C.F.R. § 121.103(h). As confirmed by the OHA and the record, SLI, together with its
proportionate share of employees of HX5 Sierra and NAS, is small under the applicable 1,000-
employee size standard. AR 13126 (explaining a review of the employee calculation worksheet
“shows that SLI’s total number of employees under the correct calculations is well within the
applicable size standard”).

For the reasons given above, the Court holds that the OHA properly applied 13 C.F.R. §
121.103(h) and correctly found that SLI must include in its total number of employees the share
of HX5 Sierra’s and NAS’ employees commensurate with its ownership in each entity, [ ] and
[ ], respectively. AR 13126. Further, the OHA correctly found that “SLI’s total number of
employees under the correct calculations is well within the applicable size standard.” AR 13144.
Thus, this Court holds that the OHA’s conclusion that SLI “is an eligible small business for the
subject procurement” was not arbitrary, capricious, or contrary to law. 33 AR 13145.

CONCLUSION

ZIN Tech has not established that NASA’s evaluat

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10744033. Public record. Not legal advice.